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Conciliation  and  Arbitration 
in  New  Zealand 


Research  Report  Number  23 
December,   1919 


National  Industrial 
Conference  Board 


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CONCILIATIOWM.ND  ARBITRATION 
IN    NEW   ZEALAND 


Research  Report  No.  23 
December,   1919 


Copyright   1919 


UNIVERSITY  of  ( 


/-<    A    T    -r-,-,^ 


TyTV\- 


LOo  ANGELES 
LIBRARY 

National  Industrial  Conference  Board 

IS    Beacon    Street 
Boston,  Mass. 


91904 


Sh^O 


£}  CONTENTS 

PAGE 

Foreword vii 

I.     Introduction      1 

Difference   between  American  and  New  Zealand 

Conditions 3 

0        II.     Development  of  the  System o 

^                        Amendments  to  the  Act 0 

Original  Principle   of  System  not  Changed  by 

Amendments 8 

III.    Administrative  Machinery 10 

^                       Method  of  Procedure  in  Conciliation 11 

'^                       Enforceability  of  Awards  and  Penalties      ...  12 

Minimum  Wage  and  Special  Wage  Provisions  13 


\ 


IV.     Principles   Followed   in   the   Arbitration   Court   of 

New  Zealand 1^3 

Principle  of  Conciliation  Firmly  Established     .  15 

V  Court  not  Compelled  to  Render  Award  ....  16 

^  Conservative  Attitude  of  Court      17 

Court's  Position  with  Respect  to  Wage-Fixing  18 

"Preference"  for  Unions 19 

Rights  of  the  Employer 20 

^        V.     Operation  of  the  New  Zealand  System 22 

^  First  Period,  1894-1901      22 

Second  Period,  1901-1908      23 

Dissatisfaction  of  Workers 24 

Third  Period,  1U08  Onward 25 

Labor  Disputes  Investigation  Act 26 

VI.     Statistical  Comparisons 28 

VII.     Results  of  the  New  Zealand  System 35 

Appendices 37 


LIST   OF  TABLES 

PAGE 

Table  1:     Number   and   Membership   of   Industrial   Unions   of 

Employers  and  Workers,  1907-1917 11 

Table  2:  Number  and  Percentage  of  Disputes  Settled  by  Con- 
ciliation and  Arbitration,  Respectively,  1894-1901,  1902- 
1908,  1909-1918      28 

Table  3:     Industrial  Agreements,  Recommendations,  and  Awards 

in  Conciliation  and  Arbitration,  1904-1918 29 

Table  4:     Disputes  Referred  to  and  Disposed  of  by  Councils  of 

Conciliation,  1910-1918 30 

Table  5:     Permits  Granted  to  Under-Rate  Workers,  1907-1915     30 

Table  6:     Number  of  Strikes  in  New  Zealand,  1894-1918   ...     31 

Table  7:     Number  of  Prosecutions  for  Enforcement  of  Awards 

and  for  Strikes  and  Lockouts,  1910-1918 31 

Table  8:  Cost  of  Administration  of  Conciliation  and  Arbitra- 
tion, 1907-1915 32 

Table  9:     Minimum  Wage  Rates  for  Various  Occupations  from 

Earliest  to  Latest  Awards 32 


Foreword 

TN  view  of  the  widespread  interest  in  evolving  some 
system  to  reduce  the  frequency  and  mitigate  the 
severity  of  industrial  disputes,  all  available  experience 
with  methods  of  mediation,  conciliation,  and  arbitration 
possesses  an  unusually  timely  interest.  Previous  re- 
search reports  have  reviewed  the  experience  of 
Canada  with  the  Canadian  Industrial  Disputes  Investi- 
gation Act,  and  the  experience  of  leading  Australian 
States  and  of  the  Australian  Commonwealth  with  similar 
programs. 

The  present  report  presents  a  review  of  the  experience 
of  New  Zealand,  which  has  the  distinction  of  leadership 
in  such  legislation  in  point  of  time. 


Conciliation  and  Arbitration  in 
New  Zealand 


INTRODUCTION 

In  the  suggestion  and  formulation  of  methods  of  con- 
ciliation and  arbitration  in  industrial  disputes  New 
Zealand  occupies  the  position  of  a  pioneer.  The  germ  of 
all  that  has  been  attempted  in  other  parts  of  the  British 
Empire  in  the  direction  of  either  conciliation  or  arbitration 
is  to  be  found  in  the  New  Zealand  Act  of  1894.  Two 
years  before  the  wages  boards  of  the  Australian  state  of 
Victoria  were  created,  and  seven  years  before  any  other 
part  of  Australia  had  adopted  arbitration,  the  New 
Zealand  system  with  its  Councils  of  Conciliation  and  its 
Courts  of  Arbitration  was  in  full  working  order.  It  is 
interesting  to  note  this  primacy  in  time,  because  the 
larger  industrial  development  and  the  more  complex 
problems  of  the  Commonwealth  of  Australia  have  caused 
the  results  of  arbitration  there  to  receive  greater  attention. 

At  first  sight,  this  leadership  of  New  Zealand  in  legisla- 
tion for  the  settlement  of  industrial  disputes  is  surprising. 
The  country  is  young  and  industrially  little  developed.  Its 
population  is  small  and  the  proportion  engaged  in  industry 
quite  meager.  In  1894,  when  the  arbitration  system  was 
introduced,  the  country  contained  less  than  700,000  white 
persons,  and  at  the  latest  estimate  its  white  population 
was  only  a  little  over  1,000,000.  Its  factory  population 
in  1894  was  less  than  30,000  and  in  1916  it  did  not  exceed 
80,000.  The  number  of  trade  unionists  recorded  in  1900 
was  17,989,  a  figure  that  by  1917  had  reached  72,873. 
While  the  latter  number  is  not  inconsiderable,  the  nature 
of  the  industries  in  which  the  trade  unionists  are  found 
reduces  its  significance.  There  is  no  large  body  of  miners 
or  of  men  employed  in  the  metal  trades.  The  largest 
unions  are  among  transport  workers,  while  builders 
come  next   in  order.     The   Dominion,  in   short,  has   no 

1 


considerable  manufactures,  no   large   industrial   centers, 
and  no  powerful  body  of  organized  unionists. 

Its  acceptance  of  conciliation  and  arbitration  was, 
therefore,  the  endorsement  of  a  principle  rather  than  the 
adoption  of  a  policy  forced  by  expediency.  It  is  true 
that  there  had  been  a  number  of  strikes  and  much  unem- 
ployment in  the  preceding  period,  which  had  injured  the 
employers  and  disheartened  and  impoverished  the  work- 
ers. These  disputes  had  made  the  relief  of  unemployment 
a  pressing  problem,  and  that  task  was  the  first  imposed 
upon  the  newly  created  Department  of  Labor.  But  in 
the  conception  of  the  first  Minister  for  Labor,  the  Hon. 
W.  Pember  Reeves,  it  was  more  important  to  find  some 
better  method  for  the  settlement  of  industrial  disputes. 
It  was  this  spirit  that  prevailed  in  the  inauguration  of  the 
arbitration  system  of  New  Zealand.  As  with  the  people 
of  Australia,  the  system  was  fundamentally  the  legislative 
expression  of  a  social  ideal. 

In  explanation  of  systems  of  conciliation  and  arbitra- 
tion it  should  be  remembered  that  conciliation,  in  dis- 
tinction to  arbitration,  is  a  method  for  securing  a  peace- 
able settlement  of  industrial  disputes  by  bringing  botK 
parties  together  for  discussion  and  negotiation.  The 
machinery  may  be  either  that  of  an  informal  conference,  a 
Board  or  Council  deriving  its  authority  from  legislative 
enactment,  or  a  constituted  Court.  Its  initiation  depends 
upon  a  mediating  or  third  party,  Vv^ho  gets  the  parties 
actually  involved  into  touch  with  each  other  and  keeps  them 
to  the  discussion  of  a  solution.  He  never  takes  sides,  nor 
gives  an  opinion,  and  seldom  votes  on  any  issue  before 
the  parties.  The  results  of  the  deliberations  are  recorded 
as  an  agreement  which  is  binding  only  on  the  parties 
who  have  been  concerned  in  the  dispute. 

Compulsory  arbitration,  which  is  the  chief  characteristic 
of  the  New  Zealand  system,  consists,  on  the  other  hand, 
in  the  Government  compelling  employers  and  employees 
to  meet  before  a  Court  or  Board  which  shall  decide  their 
differences.  Compulsion  enters  in  at  every  step.  It  is 
true  that  in  one  respect  the  New  Zealand  system  is  not  as 
rigid  as  that  of  Australia,  since  it  does  not  compel  the 
notification  of  a  dispute.  The  sections  of  the  Act  relating 
to  the  reference  of  disputes  are  permissive,  not  obligatory, 
in  wording.  But  when  a  dispute  has  been  referred  to  a 
Council  or  the  Court,  the  clement  of  compulsion  becomes 

2 


pronounced.  Witnesses  are  called  to  give  evidence,  and 
employers  must,  if  required,  produce  papers  and  books 
necessary  for  full  inquiry.  The  award  of  the  Court  is 
binding  under  a  penalty,  and  parties  to  it  are  required  to 
abstain  from  strikes  and  lockouts  during  both  the  hearing 
of  the  dispute  and  the  term  of  the  award. 

The  New  Zealand  system,  like  the  Australian,  combines 
methods  both  of  conciliation  and  arbitration.  Conciliation 
is  a  vital  part  of  the  system,  but  arbitration  is  its  foun- 
dation and  support.  The  former  method,  both  in  theory 
and  in  practice,  aflFords  an  opportunity  for  differences  to 
be  completely  or  partly  settled.  The  latter  secures  the 
final  adjustment  of  any  unsettled  elements  of  the  dispute 
and  the  enforcement  of  the  agreement  upon  all,  both 
employers  and  workers,  engaged  in  the  industry.  While 
in  the  history  of  the  system  the  stress  laid  upon  either 
method  has  varied,  the  two  methods  have  at  length  been 
integrated,  so  that  every  dispute  within  the  jurisdiction 
of  the  Industrial  Conciliation  and  Arbitration  Act  must 
first  be  submitted  to  conciliation  before  arbitration  is 
invoked. 


Difference   between    American    and  New  Zealand 

Conditions 

No  adequate  grasp  of  the  significance  of  the  New 
Zealand  system  can  be  had  by  American  readers  without 
a  full  appreciation  of  the  radical  differences  which  char- 
acterize the  two  countries.  The  population  of  New 
Zealand  is  very  homogeneous  —  over  98  per  cent  of  its 
white  population  is  of  British  stock.  In  New  Zealand  the 
principle  of  trade  unionism  is  not  merely  passively 
accepted,  but  actually  fostered.  The  activities  of  unionism 
do  not  run  to  a  struggle  for  the  opportunities  of  organiza- 
tion, though  "preference  for  unionists,"  a  form  of  closed 
shop,  is  sought.  Unlike  the  Australian  trade  unions,  and 
more  like  those  of  the  United  States,  there  was  for  twenty 
years  little  inclination  in  New  Zealand  towards  the 
formation  of  a  separate  political  party.  The  present 
Labor  Party,  which  dates  roughly  from  1914,  is  small  in 
numbers  and  weak  in  influence;  the  so-called  Liberal 
Party  has  received  the  support  of  the  working  classes,  and 
has  been  responsible  for  the  legislation  on  arbitration  as 
well  as  for  a  large  body  of  labor  laws. 

3 


A  practical  result  of  this  situation  is  that  conciliatidh 
and  arbitration  in  New  Zealand  have  been  concerned 
mainly  with  controversies  over  wages  and  hours,  and  with 
disputes  other  than  those  for  the  opportunities  of  trade 
union  organization.  Every  award  contains  provisions 
concerning  the  hours  to  be  worked,  the  rate  for  overtime, 
the  minimum  wage,  and  the  conditions  under  which 
permits  may  be  granted  to  "slow"  workers.  Very  many 
contain  a  preference  clause,  providing  that  under  certain 
conditions  and  on  the  fulfillment  of  certain  regulations, 
preference  of  employment  shall  be  given  to  unionists  in 
the  industry  covered  by  the  award.  The  arbitration 
system  brings  practically  all  conditions  of  industry  under 
review. 

These  differences  in  industrial  conditions  and  the 
nature  of  the  population,  apart  from  those  arising  out  of 
different  political  constitutions,  and  a  different  attitude 
towards  state  control,  are  fundamental,  and  not  only  must 
be  recognized  in  any  attempt  to  interpret  the  history  of 
conciliation  and  arbitration  in  New  Zealand,  but  must 
influence  in  even  greater  degree  conclusions  as  to  the 
applicability  of  the  experience  of  New  Zealand  to  countries 
differently  constituted. 


II 

DEVELOPMENT  OF  THE  SYSTEM 

The  first  Industrial  Conciliation  and  Arbitration  Act 
was  passed  in  1894  and  was  described  in  its  sub-title  as  an 
"Act  to  encourage  the  formation  of  industrial  unions 
and  associations."  It  provided  that  seven  persons,  either 
employers  or  workers,  who  were  legally  associated  for  the 
purpose  of  protecting  or  furthering  their  respective 
interests,  could  register  themselves  as  an  "industrial 
union."  The  effect  of  such  registration  would  be  to  bind 
them  to  observance  of  the  rules  of  the  industrial  union, 
and  to  the  jurisdiction  and  awards  of  any  tribunal  under 
the  Act.  An  industrial  union  might  apply  for  cancella- 
tion of  its  registration,  but  not  during  the  pendency  of  any 
proceedings  in  conciliation  or  arbitration  affecting  that 
union;  nor  would  such  cancellation  relieve  it  or  its  mem- 
bers from  obligations  incurred  under  an  industrial  agree- 
ment or  award. 

The  machinery  of  conciliation  was  to  consist  of  Boards 
of  from  four  to  six  persons,  chosen  in  equal  numbers  by 
industrial  unions  of  employers  and  workers,  respectively, 
with  a  chairman  elected  by  these  members  from  outside 
their  number.  The  Boards  were  to  officiate  within  each 
of  the  eight  industrial  districts  into  which  the  country 
was  to  be  divided.  Provision  was  made  for  special  Boards 
of  Conciliation  to  be  appointed  to  meet  any  case  of 
emergency  or  any  special  industrial  dispute.  The  Boards 
were  to  seek  to  conciliate  the  parties,  inquiring  expedi- 
tiously and  carefully  into  the  dispute,  and  making  all 
suggestions  that  they  might  deem  right  and  proper  for 
inducing  the  parties  to  come  to  a  fair  and  amicable  settle- 
ment. If  a  settlement  was  arrived  at,  it  was  to  be  put 
in  the  form  of  an  industrial  agreement  that  was  to  have 
a  currency  of  not  more  than  three  years,  but  was  to  con- 
tinue in  force  till  superseded  by  another  industrial  agree- 
ment or  by  an  award  of  the  Court.  If  no  agreement 
was  reached,  the  case  was  then  referred  to  the  Court  of 
Arbitration. 

The  Court  of  Arbitration  was  to  consist  of  three  persons, 
one  of  whom  was  to  be  a  judge  of  the  Supreme  Court.    The 

5 


other  two  were  to  be  nominated  by  the  employers'  and 
workers'  industrial  unions,  respectively.  The  Court  was 
to  hear  all  disputes  referred  to  it  by  the  Boards  of  Con- 
ciliation, and  was  to  act  by  the  principles  of  equity  and 
good  conscience  as  well  as  by  legal  evidence.  It  was 
required  to  make  an  award  in  a  dispute  within  one  month 
after  beginning  the  hearing  thereon.  It  had  the  right  and 
the  power  to  enforce  agreements  and  awards  upon  the 
respective  industrial  unions  concerned,  and  could  impose 
a  penalty  not  exceeding  £500. 

Amendments  to  the  Act^ 

The  Act  was  amended  in  1895,  1896,  and  again  in  1898. 
In  1900  the  Act  and  the  successive  amendments  were  con- 
solidated and  amended.  This  Act  of  1900  was  then  called 
the  principal  Act,  and  was  amended  in  1901,  in  1903  twice, 
and  again  in  1904.  It  was  consolidated  and  compiled  in 
1905,  and  amended  again  in  that  year  and  also  in  1906.  In 
1908  it  was  consolidated  into  what  still  remains  (1919)  the 
principal  Act.  At  the  same  time  a  most  important  amend- 
ing Act  was  passed,  which  was  again  amended  in  1911 
and  1913.  It  was  proposed  in  the  latter  year  to  con- 
solidate the  Act  again,  but  pressure  of  Parliamentary 
business  was  too  great,  and  the  war  has  prevented  any 
further  attention  to  the  matter.  The  statute  in  force 
today  is  that  of  1908,  with  the  important  amendment  of 
that  year  and  the  minor  amendments  of  1911  and  1913. 
A  proposed  addition  to  the  contemplated  consolidated 
Act  of  1913  was  made  into  a  separate  measure  and  passed 
as  the  Labor  Disputes  Investigation  Act,  1913. 

The  various  amendments  to  the  Act  from  1894  to  1913 
are  briefly  epitomized  in  the  appendix.  The  earlier  of 
these  amendments  and  some  of  the  later  ones  were  con- 
cerned with  relatively  minor  details.  It  is  worth  noting, 
however,  that  the  Amending  Act  of  1898  eliminated  from 
the  sub-title  of  the  Act  of  1894  the  words  "to  encourage 
the  formation  of  industrial  unions  and  associations." 
Definite  provision  was  also  made  for  fixing  minimum 
rates  of  wages  and  for  making  exceptions  for  workers 
unable  to  earn  the  prescribed  minimum. 

The  Consolidating  Act  of  1900  specifically  included  the 
claims  of  union  members  for  preferential  treatment  as 
within  the  definition  of  "industrial  matters,"   and  also 

1  For  chronological  amendments  to  the  Act  of  1894  see  Appendix  A. 

6 


added  the  Important  provision  that  pending  the  disposi- 
tion of  a  dispute  by  an  established  agency,  any  strike  or 
lockout  should  be  subject  to  a  penalty.  The  Amending 
Act  of  1901,  in  addition  to  defining  more  clearly  the 
territorial  jurisdiction  of  Courts  of  Conciliation  and  Arbi- 
tration, also  provided  that  a  dispute  might  go  direct  to 
the  Court  of  Arbitration  without  prior  hearing  before  a 
Board  of  Conciliation.  The  Amending  Act  of  1903, 
among  other  things,  defined  the  circumstances  under 
which  dismissal  of  an  employee  would  constitute  a  viola- 
tion of  the  Act.  The  Amending  Act  of  1906  laid  down 
more  definite  regulations  for  the  submission  of  applica- 
tions and  other  matters  of  procedure. 

The  Amending  Act  of  1908  made  a  substantial  change 
in  the  machinery  of  conciliation,  both  in  form  and  con- 
stitution. The  Conciliation  Boards  were  abolished  and  in 
place  thereof  there  were  established  Councils  of  Concilia- 
tion, a  name  which  in  itself  is  more  suggestive  of  the 
process  of  conciliation.  The  Councils,  moreover,  were 
constituted  differently  than  were  the  Boards.  The  eight 
chairmen  of  the  Boards  (one  each  of  the  eight  industrial 
districts)  were  replaced  by  Industrial  Commissioners, 
not  to  exceed  four  in  number,  appointed  by  the  Governor. 
Only  three  have  thus  far  been  appointed.  These  have 
been  assigned  jurisdiction  over  specific  areas.  When  a 
dispute  is  referred  to  any  one  of  them  he  obtains  the  names 
of  suitable  "assessors"  from  both  sides  and  from  the 
industry  in  which  the  dispute  has  arisen.  The  Council 
is,  therefore,  freshly  constituted  for  each  dispute,  and,  in 
contrast  with  the  earlier  Boards  which  had  a  fixed  tenure 
and  personnel,  consists  of  men  familiar  with  the  par- 
ticular industry  in  which  the  dispute  occurs.  This 
Amending  Act  of  1908,  furthermore,  repealed  the  Amend- 
ment of  1901,  which  had  provided  that  no  industrial  dis- 
pute could  be  referred  to  a  Court  until  it  had  been  first 
referred  to  a  Council  of  Conciliation.  Various  new 
penalties  were  also  provided  in  this  Act. 

The  Amending  Act  of  1911  dealt  largely  with  the  form 
and  force  of  awards. 

The  important  feature  of  the  Amending  Act  of  1913 
was  a  provision  that  where  the  parties  to  a  dispute  did  not 
object  to  a  recommendation  of  a  Council  of  Conciliation, 
this  should  operate  as  an  industrial  agreement  and  not 
as  an  award,  thus  limiting  its  application  to  the  parties 

7 


specifically  agreeing,  whereas  an  award  covers  all  em- 
ployers and  all  workers  in  the  industry  in  the  particular 
district. 

Throughout  the  amendments,  also,  there  is  manifest 
a  growing  objection  to  strikes  and  lockouts  and  a  tendency 
to  penalize  them  more  and  more  heavily.  Strikes  and 
lockouts  had  been  illegal  from  the  beginning  of  the 
legislation.  But  in  earlier  promulgations  stress  was 
laid  rather  on  prevention  of  strikes  by  ameliorative 
measures  than  by  penal  measures.  Thus  in  a  pamphlet 
issued  in  1898  by  the  New  Zealand  Department  of  Labor^ 
is  the  following  statement: 

The  general  tendency  of  these  laws  is  to  ameliorate  the 
position  of  the  worker  by  preventing  social  oppression 
through  undue  influences,  or  through  unsatisfactory  condi- 
tions of  sanitation;  .  .  .  their  aim  is  to  prevent  the 
installation  of  abuses  before  such  abuses  attain  formidable 
dimensions. 

But,  though  the  relatively  unfavorable  conditions  were 
removed,  industrial  dissatisfaction  and  unrest  developed, 
and  measures  became  necessary  for  maintaining  the 
decisions  of  the  Court.  Before  1900,  industrial  unions 
were  liable  to  penalties  for  breach  of  an  award,  such  as  a 
strike.  In  1900,  non-unionists  were  made  liable,  a  measure 
that  seems  to  have  been  taken  in  the  interests  of  trade 
unions.  By  the  Amending  Act  of  1905  individual  unionists 
were  made  liable  for  a  breach  of  an  award,  while  from  1908 
strikes  and  lockouts  became  statutory  offenses  where  the 
parties  concerned  were  bound  by  an  agreement  or  an 
award.  An  employer  taking  part  in  a  lockout  was  made 
liable  to  a  fine  not  exceeding  £500;  an  individual  worker 
taking  part  in  a  strike  was  subject  to  a  penalty  not  ex- 
ceeding £10. 


Original  Principle  of  System  not  Changed  by 
Amendments 

While,  therefore,  many  of  the  changes  resulting  from 
this  successive  amendment  of  the  Act  have  been  sub- 
stantial, in  general  principle  the  system  is  but  little  dif- 
ferent from  that  established  in  1894.  The  Court  of  Arbi- 
tration has  remained  without  serious  alterations  in  its 

»  New  Zealand  Year  Book,  1898,  p.  297. 

8 


character,  procedure,  and  powers.  It  is  still  a  Court  of 
final  appeal  to  which  disputes  may  ultimately  be  referred. 
It  hears  the  evidence  which  has  been  sifted  by  the  Councils 
of  Conciliation  and  gives  its  decisions  as  awards.  These 
are  binding  upon  all  employers. 

This  historical  summary  and  analysis  shows  that  a 
lengthy  and  continued  process  of  experimentation  has 
been  applied  to  the  New  Zealand  system  of  conciliation 
and  arbitration.  There  has,  however,  been  no  alteration 
in  principle;  conciliation  has  been  applied  frequently 
and  effectively.  The  experience  of  the  years  1901-1908, 
even  though  conciliation  was  not  popular,  demonstrated 
its  utility,  while  the  success  of  the  alterations  in  applica- 
tion and  procedure  indicated  new  lines  of  development. 

At  the  same  time  arbitration  has  lost  none  of  its  com- 
pulsory features.  It  has  become  more  definitely  estab- 
lished as  the  alternative  to  strikes  and  lockouts,  and  the 
weight  of  Parliamentary  enactment  has  been  lent  to  the 
maintenance  of  industrial  peace  through  arbitration  by 
penalizing  heavily  all  measures  or  acts  tending  towards  or 
creating  either  strikes  or  lockouts. 


Ill 

ADMINISTRATIVE  MACHINERY 

The  administration  of  the  Industrial  ConciUation  and 
Arbitration  Act  is  under  the  jurisdiction  of  the  Minister 
for  Labor,  as  the  head  of  a  department  of  the  Civil  Ser- 
vice, including  a  number  of  inspectors  whose  duty  it  is  to 
maintain  and  enforce  awards  and  industrial  agreements. 
For  purposes  of  administration  the  two  islands  which 
constitute  the  Dominion  of  New  Zealand  are  divided  into 
eight  industrial  districts,  each  centering  round  one  of  the 
more  important  towns.  In  these  towns  the  Councils  of 
Conciliation  meet  when  necessary,  and  the  Court  of 
Arbitration  visits  the  four  larger  centers. 

As  the  basis  of  the  administrative  system  are  the  "indus- 
trial unions,"  composed  of  not  less  than  three  employers 
on  the  one  hand,  or  fifteen  workers,  on  the  other,  all 
of  whom  must  be  engaged  in  the  industry  for  which  the 
industrial  union  is  formed.  The  name  given  to  the 
industrial  union  specifies  to  what  locality  it  belongs  and 
whether  it  is  composed  of  employers  or  workers.  Any 
two  or  more  industrial  unions  of  either  employers  or 
workers  may  register  as  an  industrial  association.  This 
latter,  it  is  obvious,  would  cover  at  least  two  districts, 
and  may  include  the  whole  Dominion.  These  industrial 
unions  and  associations  are  required  to  register  with  the 
Court,  and  to  furnish  the  Secretary  of  Labor  with  a  yearly 
statement  of  their  membership.  In  1917  there  were  145 
unions  of  employers,  with  5,390  members,  and  382  unions 
of  workers  with  72,873  members.  Their  number  and 
membership  for  each  year  from  1907  to  1917,  inclusive, 
are  given  in  Table  1. 


10 


TABLE     i:        NUMBER     AND     MEMBERSHIP     OF     INDUSTRIAL 
UNIONS   OF   EMPLOYERS  AND  WORKERS,    I907-I917 

(New  Zealand  Official  Year  Book,  1918,  p.  637) 


Employers 

Workers 

Year 

Unions 

Membership 

Unions 

Membership 

1907 

121 

3,630 

310 

45.614 

1908 

122 

3,918 

325 

49,347 

1909 

120 

3,702 

308 

54,519 

1910 

118 

4,262 

308 

57.091 

1911 

118 

4,251 

307 

55,629 

1912 

123 

4,410 

322 

60,622 

1913 

134 

4,700 

372 

71,544 

1914 

149 

5,819 

403 

73,991 

1915 

141 

5,718 

389 

67,661 

1916 

141 

5,554 

378 

71,38& 

1917 

145 

5,390 

382 

72.87S 

Method  of  Procedure  in  Conciliation 

The  conciliation  machinery  as  described  above  consists 
of  Councils  of  Conciliation,  called  into  existence  in  each 
particular  dispute  by  one  of  three  Industrial  Commis- 
sioners, who  hold  ofRce  for  four  years.  A  dispute  may  be 
referred  to  a  commissioner  by  a  trade  union,  an  industrial 
association,  or  an  employer.  The  commissioner  is  charged 
with  the  duty  of  setting  up  a  Council  to  deal  with  a  dis- 
pute. The  parties  are  heard  before  the  Council  and  are 
urged  to  settle  all  or  as  many  points  of  difference  as 
possible.  If  a  settlement  is  arrived  at,  the  terms  of  the 
settlement  are  set  forth  as  an  industrial  agreement,  which 
is  often  for  convenience  taken  before  the  Court  of  Arbi- 
tration and  registered  as  an  award.  If  no  settlement  is 
arrived  at  by  conference  some  temporary  and  provisional 
arrangement  is  sought  while  the  matter  is  being  heard 
before  the  Arbitration  Court.  If  the  assessors  on  both 
sides  can  reach  a  unanimous  conclusion,  the  Council  may 
make  a  recommendation,  which  is  filed  for  public  notifica- 
tion. Should  none  of  the  parties,  after  due  notice,  disagree 
with  such  recommendation  within  one  month,  it  becomes 
binding  and  is  enforceable  upon  the  parties  as  an  industrial 
agreement.  If  the  unanimous  recommendation  of  the 
assessors  is  disagreed  with  by  either  party,  or  if  no  settle- 
ment is  arrived  at  in  any  way,  the  dispute  goes  forthwith 
to  the  Court  of  Arbitration. 

The  Court  of  Arbitration  consists  of  a  judge  of  the 
Supreme  Court,  with  two  assessors,  one  nominated  by 

11 


employers,  the  other  by  the  workers.  Since  the  presiding 
judge  is  a  member  of  the  highest  Court  of  the  land,  the  | 

Court  of  Arbitration  has  thereby  considerable  prestige,  1 

and  because  of  its  jurisdiction  is  one  of  the  most  powerful  i' 

courts  in  the  British  Empire.     Its  decisions  are  subject  f 

to  no  appeal,  except  on  certain  points  of  law,  and  it  is  :i 

significant  that  practically  all  appeals  have  been  rejected  | 

and  the  action  of  the  Court  upheld.  The  Court  proceeds 
more  by  equity  and  the  principle  of  "a  square  deal"  than 
by  law.  No  barrister  or  solicitor  may  appear  before  it, 
except  with  the  consent  of  all  the  parties,  and  this  consent 
has  never  been  given.  Decisions  are  arrived  at  expedi- 
tiously, since  the  Councils  of  Conciliation  have  narrowed 
the  issues,  digested  and  systematized  the  evidence,  and 
chosen  those  witnesses  only  whose  evidence  was  proved 
in  the  lower  tribunal  to  be  significant.  It  should  be 
recorded  that  in  contradistinction  to  the  practice  of  the 
presidents  of  the  Courts  of  Arbitration  of  the  Common- 
wealths of  Australia  and  New  South  Wales,  respectively, 
the  awards  of  the  New  Zealand  Court  of  Arbitration  are 
invariably  given  without  any  considerable  comment. 
Brief  summarized  reasons  for  the  award  are  frequently  set  % 

forth,  but  seldom  anything  approaching  the  discussion  of  1| 

economic  principles  and  of  their  application  to  the  dispute, 
such  as  characterizes  the  awards  of  Mr.  Justice  H.  B. 
Higgins  of  the  Court  of  Arbitration  of  the  Commonwealth 
of  Australia.  m 

■;7 
'!* 

Enforceability  of  Awards  and  Penalties 

The  awards  of  the  Court  are  binding  upon  every  em- 
ployer who  is,  or  may  be,  engaged  in  the  industry  while 
the  award  is  in  force,  and  upon  every  worker  employed  by 
such  employer.  A  worker  who  commits  a  breach  of  an 
award  is  liable  to  a  fine  not  exceeding  £10.  An  employer 
who  does  not  fulfill  all  the  terms  of  an  award  respecting 
wages  is  similarly  liable  to  a  penalty  and  to  the  payment 
of  back  wages.  ^' 

Prior  to  1903  it  was  left  to  unions  to  initiate  proceedings 
for  breach  of  an  award,  and  they  received  as  a  return  the 
fines  which  were  imposed.  This  function  was,  however, 
taken  from  them  in  1903  and  placed  in  the  hands  of  in- 
spectors of  factories,  who  recovered  the  fines  for  the 
public  treasury.  Before  1905,  proceedings  for  breach  of 
an  award  were  taken  before  the  Court  of  Arbitration, 

12 


which  at  that  period  was  greatly  congested  with  more  im- 
portant matters.  Consequently  the  enforcement  of 
awards  was  delegated  to  the  petty  courts  of  the  country. 

The  penal  provisions  of  the  Act  apply  specifically  since 
1908  to  strikes  and  lockouts.  A  worker  in  an  industry 
covered  by  an  industrial  agreement  or  award  wherein  a 
strike  has  occurred  is  liable  to  a  penalty  not  exceeding 
£10.  An  employer  bound  by  an  industrial  agreement  or 
award  who  takes  part  in  a  lockout  is  penalized  by  a  sum 
not  exceeding  £500.  Incitement  or  instigation  to  an 
unlawful  strike  or  lockout  is  penalized  by  a  sum  not 
exceeding  £10  in  the  case  of  a  worker  or  £100  in  the  case 
of  an  employer,  a  trade  union,  an  industrial  union,  or  any 
person  other  than  a  worker. 

The  New  Zealand  system  has  always  tended  to  protect 
trade  unionists  by  virtue  of  its  resting  upon  a  foundation 
of  trade  unionism.  This  protection  has  taken  the  ex- 
pressed form  of  preference,  to  be  discussed  later,  but  in 
the  administrative  machinery  it  is  represented  by  penal 
provisions.  An  employer  who  dismisses  a  worker  because 
of  the  fact  that  this  worker  is  a  member  of  an  industrial 
union  or  has  taken  a  prominent  part  in  placing  a  dispute 
before  a  Council  of  Conciliation  is  fined  a  sum  not  exceed- 
ing £25.  Where  the  worker  was  an  official  of  a  union  or 
appeared  before  the  Council  of  Conciliation  in  a  repre- 
sentative capacity,  the  onus  of  proof  is  on  the  employer 
to  show  that  he  dismissed  this  worker  for  some  other 
reason.  Several  prosecutions  on  this  count  have  taken 
place,  but  the  decisions  rarely  reveal  any  bias  on  the 
part  of  employers  against  trade  unionists. 

Minimum  Wage  and  Special  Wage  Provisions 

By  statute,  the  Court  is  empowered  to  include  a  mini- 
mum wage  in  its  awards,  and  to  provide  for  the  granting  of 
permits  to  work  at  a  lower  rate,  to  those  who  are  unable  to 
earn  the  prescribed  minimum.  The  issue  of  permits  has 
now  become  a  function  of  the  local  Inspector  of  Awards. 
It  was  formerly  done  mainly  through  the  trade  unions, 
which,  however,  were  so  reluctant  to  grant  permits  that 
they  inflicted  some  hardship  on  these  subnormal  workers 
by  practically  making  employment  impossible  for  them. 
Now  any  worker  who,  in  the  language  of  a  recent  award, 
"considers  himself  incapable  of  earning  the  minimum 
wage  fixed  by  this  award"  must  apply  to  the  local  official 

13 


to  have  his  rate  of  wages  fixed.  The  official  notifies  the 
union  concerned  and  the  secretary  thereof  is  allowed  to 
state  any  objections.  The  wage  is  then  fixed  for  a  period 
not  exceeding  six  months,  or  until  demand  is  made  by  the 
secretary  of  the  union  that  the  wage  shall  again  be  fixed. 
In  the  case  of  old  men  or  those  sufi"ering  from  physical 
disability,  the  wage  may  be  fixed  for  a  longer  period.  By  a 
very  recent  Order  in  Council  (July  15,  1919)  there  were 
suspended  the  provisions  of  all  awards  and  industrial 
agreements  prescribing  conditions  of  employment  for 
under-rate  workers  and  any  other  conditions  of  the  In- 
dustrial Conciliation  Arbitration  Act,  so  far  as  these 
provisions  prevented  or  restricted  the  employment  and 
training  of  discharged  soldiers. 


14 


IV 

PRINCIPLES  FOLLOWED  IN  THE  ARBITRATION 
COURT  OF  NEW  ZEALAND 

The  principles  followed  by  the  New  Zealand  Court  of 
Arbitration  do  not  differ  significantly  from  those  followed 
in  the  corresponding  Court  of  the  Commonwealth  of 
Australia.^  They  are  less  frequently  and  less  clearly 
enunciated,  and  are  somewhat  more  favorable  to  the 
viewpoint  of  employers.  The  minimum  wage  and  the 
whole  method  of  wage-fixing  is  diflFerent  in  both  principle 
and  technique,  but  in  other  respects  the  two  courts  are 
analogous. 

The  New  Zealand  system  lays  stress  on  the  superiority 
of  arbitration  over  the  method  of  the  strike  as  a  means  of 
settling  industrial  disputes.  Time  and  again  the  pre- 
siding judge  has  emphasized  the  object  of  the  Industrial 
Conciliation  and  Arbitration  Acts  as  consisting  in  securing 
the  settlement  of  all  industrial  disputes  by  means  of  con- 
ciliation and  arbitration.  He  has  insisted  that  arbitration 
and  strikes  cannot  exist  together  as  remedies  for  the 
settlement  of  industrial  disputes.  When  industrial  unrest 
has  been  increasing,  the  judge  has  used  such  words  of 
warning  as  the  following:^ 

The  workers  of  the  Dominion  must  make  up  their  minds 
which  of  these  remedies  they  desire  to  see  retained.  They 
cannot  have  both,  and  they  must  elect  which  they  will 
support. 

Principle  of  Conciliation  Firmly  Established 

Since  1908  the  principle  of  conciliation  has  become 
firmly  established  as  a  primary  consideration.  It  is  now 
regarded  as  a  necessary  preliminary  to  arbitration.  Prior 
to  1908  most  of  the  objection  to  conciliation  had  come 
from  employers,  and  most  of  the  support  from  the  workers. 
But  more  recently  there  has  been  an  endeavor  on  the  part 
of   the   workers    to    secure    arbitration    in    preference    to 

^  See  National  Industrial  Conference  Board,  Research  Report  No.  10,  Arbi- 
tration and  Wage-Fixing  in  Australia,  pp.  34—37. 

*  Awards  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  IX,  p.  59. 

15 


conciliation  as  a  means  to  the  advancement  of  industrial 
unionism.  This  endeavor  has  taken  the  form  of  bringing 
separate  disputes  forward  as  one  dispute.  Thus,  in  1909 
a  union  cited  a  large  number  of  employers  as  parties  to  a 
single  dispute,  including  such  diverse  groups  as  builders, 
contractors,  quarry  proprietors,  local  municipal  councils, 
and  iron-founders.  The  judge  objected  to  the  attempt  to 
nullify  the  provisions  of  the  Act  concerning  conciliation, 
and  had  the  dispute  divided  into  sections  and  referred  as 
separate  hearings  to  the  conciliation  commissioner,^ 


Court  not  Compelled  to  Render  Award 

While  the  Court  has  always  given  a  patient  hearing  to 
the  subject  matter  of  a  dispute,  it  has  reserved  to  itself  the 
right  to  refrain  from  making  an  award  or  from  altering 
an  existing  award  or  agreement  where  the  circumstances 
did  not  seem  to  justify  such  alteration.  The  Amending 
Act  of  1908  expressly  permitted  the  Court  to  refuse  to 
make  an  award  if  for  any  reason  it  considered  it  desirable 
to  do  so.  This  statutory  protection  arose  out  of  the  action 
of  the  Court  in  an  agricultural  dispute  involving  some 
4,000  stockmen  and  farmers  in  the  Canterbury  districts. 
After  a  protracted  and  costly  hearing  before  the  Board  of 
Conciliation,  and  an  equally  unsatisfactory  hearing  in 
arbitration,  the  Court  determined  not  to  make  an  award.^ 

It  held  that  an  award  covering  the  whole  of  such  an 
industry  and  fixing  hours  and  wages  justly  was  not 
practicable.  In  another  case  Involving  a  coal  miners' 
union,  the  judge  declared  that  there  was  no  necessity  for 
bringing  the  case  before  the  Court,  since  there  was  no 
*' substantial  question  in  dispute."^  In  a  further  case  the 
Court  declined  to  do  anything  that  would  alter  or  affect 
the  tenure  of  the  award  then  in  force  covering  the  coal 
mining  industry.  After  the  award  then  in  force  had  been 
issued,  legislative  measures  defining  the  day's  work  In 
mines  had  altered  conditions  so  that,  as  the  employers 
demonstrated,  a  loss  would  fall  upon  them  If  the  reduced 
workday  with  overtime  came  into  force.  The  legislation 
was  not  to  operate  during  the  tenure  of  the  award  then  in 
force.     To  render  what  it  considered  justice  to  the  em- 

A'^'aHs  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  X,  pp. 
339,  472. 

» Ibid.,  Vol.  IX,  pp.  517,  528. 

3  Ibid.,  Vol.  XVIII,  p.  1179. 

16 


ployers,  the  Court  declined  to  make  any  alterations  in 
that  award. ^ 


Conservative  Attitude  of  Court 

In  conformity  with  this  principle  is  that  by  which  the 
Court  insists  that  working  conditions  and  customs 
obtaining  in  the  industry  are  not  to  be  lightly  changed.  In 
1902  the  workers  in  the  Canterbury  woolen  mills  asked  for 
a  reduction  in  hours  from  48  to  45  per  week  and  for  the 
abolition  of  piecework.  Both  demands  were  refused,  on 
the  following  grounds  :"- 

We  are  satisfied  that  no  real  cause  for  complaint  exists 
and  that  these  workers  are  well  treated  and  well  paid  under 
the  present  system  and  we  make  no  alteration  in  the  condi- 
tions at  present  existing. 

On  one  occasion  the  Court  was  asked  to  abolish  a 
recognized  custom  of  industry,  that  of  the  contract  system 
in  mines.  It  refused  to  do  so  unless  shown  by  preponderat- 
ing evidence  that  the  change  was  necessary  in  the  interests 
of  justice.  On  another  occasion  the  Court  refused  to 
insert  a  clause  in  an  award  requiring  employers  to  give 
reasons  for  the  dismissal  of  their  men.  It  based  its  action 
on  the  grounds  that  men  were  not,  and  could  not  be, 
compelled  to  give  reasons  for  leaving  a  job  and  that  the 
existing  custom  could  not  lightly  or  justly  be  disturbed. 
Even  as  late  as  1917  the  same  principle  was  explicitly  laid 
down  as  in  the  following  extract  from  a  judgment  of  the 
Court  :^ 

In  the  claim  made  by  the  union  a  great  number  of  altera- 
tions and  additions  to  the  existing  general  conditions  of 
employment  were  asked  for.  The  Court  has  repeatedly  laid 
it  down  that  general  working  conditions  which  have  been 
settled  and  acted  upon  for  years  will  not  be  disturbed  unless 
clear  evidence  is  brought  forward  to  show  the  necessity  for 
amendment. 

An  interesting  application  of  this  reluctance  to  alter 
existing  awards  was  manifested  in  May,  1906.  At  that 
date  the  Colonial  Sugar  Refining  Company  and  its  em- 
ployees arrived  at  an  agreement  for  an  increase  in  wages 

*  Quoted  in  Broadhead,  State   Regulation  of  Labour  and  Labour   Disputes 
in  New  Zealand,  p.  167. 

^  Quoted  ibid.,  p.  4L 

'Awards  and  .\greements,  New  Zealand  Court  of  .'\rbitration,  Vol.  XV'III, 
p.  428. 

17 


and  a  change  in  hours  while  an  award  was  in  force.  The 
new  agreement  was  brought  before  the  Court,  which  did 
not  alter  the  award.  It  showed  how  the  award  was  the 
only  enforceable  agreement,  but  expressed  its  satisfaction 
that  such  an  agreement  as  the  new  one  could  be  arrived 
at,  and  left  it  to  the  industry  to  be  observed  voluntarily.^ 

Court's  Position  with  Respect  to  Wage-Fixing 

In  regard  to  wage-fixing  no  definite  principle  has  been 
evolved.  The  Court  invariably  names  a  minimum  wage 
in  each  award.  But  it  should  be  noted  that  this  minimum 
wage  is  not  a  minimum  subsistence  wage  as  is  that 
awarded  by  the  Arbitration  Courts  of  Australia. ^  It 
is  rather  "an  ideal  wage  such  as  an  able-bodied  worker  of 
average  ability  ought  to  earn"  and  is  generally  "higher 
than  the  average  wages  prevailing  in  the  trade  at  the  time 
the  award  was  made."^  This  minimum  sum  is  generally 
arrived  at  as  a  compromise  between  the  demands  of  the 
union  and  the  offers  of  the  employers. 

The  fact  that  the  minimum  wage  is  near  the  average 
wage  in  the  industry  gives  prominence  to  the  provision 
for  permits  to  work  at  a  lower  wage.  In  fixing  this  lower 
wage  the  official  charged  with  the  duty  is  required  to 

have  regard  to  the  worker's  capability,  his  past  earnings,  and 
suchothercircumstances  as  such  inspector  orother  person  shall 
think  fit  to  consider  after  hearing  such  evidence  and  argument 
as  the  union  and  such  worker  shall  offer.* 

The  permit  given  to  such  a  worker  is  restricted  in  time, 
so  as  to  protect  the  principle  of  the  minimum  in  case  the 
worker  should  improve  in  ability  and  become  able  to  earn 
the  minimum.  Where  an  under  rate  is  fixed  for  a  person 
by  reason  of  old  age  or  permanent  disability,  the  same 
contingency  does  not  arise,  and  the  period  may  be  much 
longer. 

It  should  be  noted  that  this  provision  for  a  permit  tends 
to  nullify  the  principle  of  a  minimum  wage. 

In  1906  and  1907  the  unions  began  to  ask  that  some 
form  of  profit-sharing  be  adopted.     The  response  of  the 

1  Awards  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  VII,  pp. 
233-235. 

"*  National  Industrial  Conference  Board,  Research  Report  No.  10,  Arbitra- 
tion and  Wage-Fixing  in  Australia,  pp.  34,  35. 

'  Stewart  and  Le  Rossignol,  State  Socialism  in  New  Zealand,  p.  232.  Cf. 
also  Broadhead,  ut  supra,  p.  57. 

*  This  condition  is  found  in  similar  form  In  most  awards. 

18 


Court  was  identical  with  that  of  the  Australian  Common- 
wealth. It  pointed  out  that  such  a  principle  would  involve 
the  necessity  of  fixing  a  differential  wage  rate  between  the 
successful  and  the  less  successful  employer,  and  would  lead 
to  confusion  and  irritation.  The  positive  attitude  of  the 
Court  is  found  in  a  statement  from  Mr.  Justice  Sim,  then 
President  of  the  Court  :^ 

The  Court  should  endeavor  to  give  the  men  air  remunera- 
tion for  their  work,  regardless  of  whether  employers  get  a 
profit  or  not.  Profits  could  only  be  taken  into  consideration  in 
extreme  cases.  There  were  cases  where  an  increase  in  wages, 
would  wipe  out  a  business.* 

The  question  of  increased  cost  of  living  has  not  become 
acute  in  New  Zealand.  There,  food  prices  have  not  in- 
creased during  the  war  more  than  48  per  cent  above  pre- 
war prices,  while  house  rents  have  fallen.^  In  some  cases 
a  war  bonus  of  10  per  cent  has  been  added  but  no  per- 
manent increase  given.^ 

"Preference"  for  Unions 

In  view  of  the  fact  that  proceedings  in  conciliation  and 
arbitration  rest  upon  the  basis  of  organizations  of  em- 
ployers and  workers,  the  principle  of  preference  has  come 
to  play  an  important  part  in  public  discussion  of  the 
system,  though  its  significance  is  really  inconsiderable. 
As  noted,  the  Amending  Act  of  1900  had  specifically  pro- 
vided for  reciprocal  preference  between  the  industrial 
unions  of  employers  and  workers  respectively,  in  the 
industry  concerned.  In  practice,  since  the  unions  which 
registered  under  the  Act  often  did  not  include  all  the 
workers  in  the  industry,  this  provision  was  chiefly  useful 
to  the  workers.  Industrial  unions  of  workers  generally 
ask  for  preference  but  their  request  is  not  always  granted. 
It  is  refused  where  the  workers  are  widely  scattered  or 
where  many  businesses  are  involved.  But  where  the 
members  of  a  union  form  a  large  majority  of  the  workers 
in  the  trade  affected,  and  where  the  rules  of  the  union 
allow  for  the  easy  entrance  of  non-unionists,  preference  is 
granted. 

^  Quoted  in  Broadhead,  ut  supra,  p.  61. 

*  Awards  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  XVIII, 
pp.  1298-1299. 

»  Labour  Gazette  (London),  October,  1919,  p.  424. 

*  Ibid.,  Vol.  XVIII,  p.  71. 

19 


A  typical  provision  for  preference  runs  as  follows: 

If  an  employer  shall  hereafter  engage  any  worker  coming 
within  the  scope  of  the  award  who  shall  not  be  a  member  of 
the  union,  or  who  shall  not  become  a  member  thereof  within 
fourteen  days  after  his  engagement  and  remain  such  member, 
the  employer  shall  dismiss  such  worker  from  his  service  if 
required  to  do  so  by  the  union,  provided  there  is  then  a 
member  of  the  union  equally  qualified  to  perform  the  particular 
work  required  to  be  done,  and  ready  and  willing  to  undertake 
to   do  the  same. 

The  provisions  of  the  foregoing  clause  shall  operate  only 
if  and  so  long  as  the  rules  of  the  union  shall  permit  any 
worker  coming  within  the  scope  of  this  award  of  good  char- 
acter and  sober  habits  to  become  a  member  of  the  union 
upon  payment  of  an  entrance  fee  not  exceeding  five  shillings 
upon  a  written  application,  without  ballot  or  other  election, 
and  to  continue  a  member  upon  payment  of  subsequent  con- 
tributions not  exceeding  sixpence  per  week. 

It  should  be  noted  that  in  1913  firemen  and  reporters, 
who  received  an  award  fixing  wages  and  hours,  were 
granted  preference,  but  were  bound  not  to  affiliate  with 
or  have  connections  or  dealings  with  any  federation  of 
trade  unions  or  any  industrial  federation  of  workers.^ 

Further,  just  as  preference  is  a  benefit  to  a  union,  so 
its  withdrawal  can  be  made  a  punishment.  In  an  en- 
gineering dispute,  in  1917,  the  union  instructed  all  engi- 
neers to  refuse  to  work  overtime.  This  action  was  declared 
"unjustifiable  and  unreasonable"  by  the  Court,  which, 
to  mark  its  disapproval,  refused  to  continue  the  preference 
of  employment  which  the  union  had  previously  enjoyed.^ 

The  principle  of  preference  does  not  go  as  far  as  com- 
pulsory unionism.  The  Court  may  provide  for  preference 
to  unionists,  in  which  the  choice  is  left  to  the  worker 
between  unemployment  and  joining  the  union,  but  it 
cannot  compel  any  person  to  join  a  union.^ 

Rights  of  the  Employer 

From  the  inauguration  of  the  arbitration  system.  New 
Zealand  employers  have  been  insistent  on  the  assertion 
of  their  right  to  the  full  control  of  their  factories.    Their 

'  Awards  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  XIV, 
p.  535. 
2 /Z-jW.,  Vol.  XVIII,  p.  1189. 

'  See  Annual  Report  of  the  Department  of  Labor,  New  Zealand,  1917. 

20 


contention  has  had  substantial  support  from  the  Court. 
Thus,  in  an  award  dated  1899  applying  to  the  Auckland 
Boot  Trade,  it  was  held : 

(a)  It  is  the  individual  right  of  the  employer  to  decide 
whom  he  shall  employ  or  dismiss.' 

{b)  It  is  the  individual  right  of  the  workman  to  accept 
or  refuse  work  from  any  employer. 

It  is  the  manufacturer's  right  to  introduce  whatever 
machinery  he  deems  necessary  or  his  business  may  require. 
If  a  division  or  subdivision  of  labor  is  required  for  the  purpose 
of  working  such  machinery,  such  division  or  subdivision  shall 
be  allowed,  subject  to  the  minimum  wage.  Weekly  hands 
may  be  employed  in  connection  with  machinery  subject  to 
payment  ol  the  minimum  wage  hereinafter  provided.  No 
restriction  shall  be  put  upon  the  output  of  any  machine  or 
the  method  of  working  such  machine. 

Every  employer  is  entitled  to  the  fullest  control  over  the 
management  of  his  factory  and  to  make  such  regulations  as  he 
deems  necessary  for  timekeeping  and  good  order. 

In  a  later  award  the  first  two  clauses  do  not  appear  but 
the  substance  of  the  others  is  repeated.^ 

1  Cf.  Awards  and  Agreements,  New  Zealand  Court  of  Arbitration,  Vol.  V, 
p.  27,  with  ibid.,  Vol.  XVIII,  p.  3&4. 

'  In  this  connection,  see  the  provisions  for  preference  on  p.  20. 


21 


V 

OPERATION  OF  THE  NEW  ZEALAND  SYSTEM 

In  order  to  appraise  the  results  achieved  by  arbitration 
in  New  Zealand,  a  brief  review  of  the  actual  working  of 
the  Act  is  desirable.  The  period  of  its  operation  is  marked 
off  into  three  significant  divisions,  with  respect  to  the 
attitudes  of  the  employers  and  the  workers,  respectively, 
and  according  to  the  status  and  prestige  of  the  principle 
of  conciliation  in  the  system.    These  periods  are  as  follows: 

1894 — 1901,  from  the  passing  of  the  principal  Act  to  the 
period  when  an  amendment  reduced  the  Boards  of  Concih- 
ation  to  a  nullity.  During  this  time  the  workers  were  heartily 
on  the  side  of  the  Act,  while  the  employers  were  distrustful 
and  doubted  both  its  necessity  and  its  efficacy. 

1901  —  1908,  the  period  during  which  conciliation  was  very 
largely  in  abeyance,  when  the  workers  were  receiving  less 
from  the  Act,  and  when  the  employers  were  finding  its 
operation  a  bulwark  against  the  demands  of  the  workers. 

1908  —  onward,  when  conciliation  was  restored,  but  when 
a  large  section  of  the  workers  was  in  open  revolt  against  the 
Act,  and  employers  were  upholding  it  and  utilizing  its  pro- 
visions in  their  own  defense. 

First  Period:     1894-1901 

When  the  Act  was  passed  in  1894  it  met  the  whole- 
hearted support  of  the  workers.  Employers,  however, 
were  resolutely  opposed  to  its  compulsory  features,  and 
had  thrice  defeated  similar  measures  in  the  preceding 
Parliament.  When  awards  under  the  Act  began  to 
appear,  they  were  found  to  give  the  workers  continuous 
advances  in  wages,  with,  in  many  cases,  reductions  in 
the  hours  worked.  Many  of  the  awards  also  contained 
clauses  granting  preference  to  unionists.  There  were 
no  strikes  against  the  Act,  for  no  strike  could  effect  such 
favorable  conditions  as  were  obtained  in  the  awards 
granted  by  the  Court. 

Employers,  on  the  other  hand,  were  driven  into  an 
attitude  of  persistent  opposition.  Most  of  this  centered 
on  the  working  of  the  Boards  of  Conciliation.     One  or 

22 


two  of  them  seem  to  have  deserved  much  of  the  censure 
directed  against  their  constitution  and  procedure.  Their 
members  held  a  fixed  office  and  were  consequently  often 
called  upon  to  investigate  and  settle  disputes  involving 
technical  matters  in  which  they  had  no  competence. 
Because  the  members  belonged  each  to  one  specific 
trade,  their  decisions  in  another  and  different  trade 
frequently  roused  discontent.  An  effort  to  utilize  experts 
to  assist  the  Boards  proved  a  failure.  The  procedure 
of  the  Boards  was  slow,  costly,  and  partisan.  Two  at 
least  were  condemned  on  all  sides  for  their  inefi^ectiveness 
and  their  provocative  tendencies.  Their  efforts  at  con- 
ciliation failed  more  often  than  they  succeeded.  In 
consequence,  disputes  had  to  be  heard  twice,  and  em- 
ployers came  to  assert  that,  if  such  a  system  was  called 
for,  the  Arbitration  Court  was  sufficient  and  the  Boards 
should  be  abolished. 

It  is  evident  that  the  attitude  of  the  employers  was 
responsible  for  this  failure  of  the  machinery  for  con- 
ciliation. They  refused  in  large  part  to  recognize  the 
Act,  neglected  to  organize,  and  failed  to  nominate  em- 
ployer members  of  the  Boards.  In  the  latter  contin- 
gency, the  Government,  exercising  its  prerogative  and 
acting  in  their  stead,  nominated  members.  But  these 
nominees  were  unrepresentative  and  often  unsatisfactory 
to  employers.  The  Act  was  amended  to  allow  2.  smaller 
number  of  employers  to  organize,  and  it  is  significant 
of  the  reluctance  of  employers  that  at  length  as  few  as 
two  employers  were  permitted  to  form  an  industrial 
union  to  utilize  the  machinery  of  the  Court. 

Second  Period:     1901-1908 

The  second  period  commences  with  the  practical  sus- 
pension of  the  principle  of  conciliation  and  the  nullifying 
of  the  activity  of  the  Boards.  The  employers  were  now 
more  favorable  to  the  system,  since  the  Court  of  Arbitra- 
tion had  already  warned  the  workers  that  concessions 
would  come  more  slowly.  The  awards  of  the  Court 
consequently  came  in  for  much  criticism  from  the  workers 
and  the  President  of  the  Court  found  himself  in  the  posi- 
tion, unusual  for  a  judge,  of  having  his  decisions  traversed. 
In  consequence,  judges  were  unwilling  to  hold  their 
positions  longer  than  necessary,  and  changes  in  procedure 
arose  from  changes  in  the  person  of  the  President  of 
the  Court. 

23 


Dissatisfaction  of  Workers.  As  a  result,  industrial 
unions  of  workers  came  to  assert  their  dissatisfaction 
with  the  awards,  procedure,  and  spirit  of  the  Court  of 
Arbitration.  Part  of  this  discontent  had  arisen  from  the 
practical  abandonment  of  the  conciliation  procedure. 
By  the  Amending  Act  of  1901  more  was  lost  than  was 
apparent.  The  Boards  of  Conciliation  were  demonstrated 
to  have  had  a  utility  not  to  be  measured  by  the  number 
of  recommendations  they  made  or  the  number  of  these 
recommendations  accepted  by  both  sides.  In  respect 
to  procedure  alone,  they  dealt  with  masses  of  conflicting 
evidence;  they  heard  every  witness  the  workers  brought 
forward;  they  narrowed  down  the  differences  between 
the  parties  and  prepared  a  compact  and  concise  case 
for  the  Court  of  Arbitration.  Without  this  assistance 
the  Court  soon  became  congested.  In  its  more  legal  and 
formal  atmosphere  the  workers  were  ill  at  ease,  hence 
their  complaint  at  their  annual  Trades  Councils'  Confer- 
ence, 1906,  that  "they  were  getting  too  much  law  and 
too  little  justice."^  The  decisions  of  the  Court  and  the 
amending  acts  of  Parliament  combined  to  create  great 
industrial  unrest. 

This  culminated  in  1906  in  the  first  strike  New  Zealand 
had  had  since  1894.  In  the  year  ending  March  31,  1907, 
there  were  twelve  strikes,  and  twelve  more  in  the  following 
year.  The  era  of  peace  had  apparently  ended.  Employers 
and  the  public  alike  came  to  feel  that  measures  must  be 
taken  to  prevent  strikes.  The  Amending  Act  of  1908, 
therefore,  defined  strikes  and  lockouts,  and  prescribed 
penal  measures  against  them.  At  the  same  time,  however, 
it  yielded  so  far  to  the  complaints  of  the  workers  as  to 
restore  the  method  of  conciliation.  An  official  manifesto^ 
of  the  Wellington  Trades  and  Labor  Council,  July  2,  1908, 
shows  both  their  objections  to  the  Act  and  the  spirit 
in  which  they  were  ready  to  receive  the  amendments: 

We  want  the  Act  as  originally  conceived  by  the  framer.  .  .  . 
The  failure  of  the  present  Act  is  due  to  the  fact  that  em- 
ployers have  designedly  ignored  the  Boards  [of  Conciliation] 
and  relied  on  the  Court  [of  Arbitration].  The  constitution  of 
the  Court,  with  its  legal  encumbrances  and  formula  and  the 
unconscious  bias  of  its  president,  makes  the  odds  two  to  one 
against  the   workers   every   time.     The  Court  has  of   late, 

1  Quoted  in  Broadhead,  State  Regulation  of  Labour  and  Labour  Disputes 
in  New  Zealand,  p.  177. 

*  Quoted  in  Scholefield,  G.  H.,  New  Zealand  in  Evolution,  p.  240. 

24 


in  addition  to  its  failure  to  improve  the  industrial  condition  of 
workers,  attempted  to  usurp  the  power  of  the  legislature,  and 
each  attempt  has  been  with  the  object  of  depriving  the  worker 
of  constitutional  rights  already  granted.  We  for  the  time 
being  advise  the  workers  to  adhere  to  the  principle.  As  an 
improved  method  of  settling  industrial  disputes  conciliation 
has  always  been  advocated  by  the  workers,  and  we  again  urge 
the  importance  of  it.  Only  as  a  last  resort  should  the  Court, 
in  our  opinion,  be  resorted  to. 

Third  Period:  1908  Onward 
The  third  period  opened  with  a  more  promising  method 
of  conciliation  in  vogue,  but  with  penal  provisions  for 
strikes  and  lockouts  also  in  force.  These  penal  provisions, 
it  should  be  noted,  were  applicable  only  to  unions  which 
were  registered  under  the  Act  and  bound  by  an  industrial 
.agreement  or  award  of  the  Court.  Much  resentment 
'sprang  up  against  them.  They  would  compel  the  workers 
to  obey  the  law,  but  would  bring  no  additional  benefits. 
Their  effect  was,  therefore,  to  heighten  a  contrast  hitherto 
little  noticed  between  unions  registered  and  unions 
not  registered  under  the  Act.  The  latter  were  seen  now 
to  have  the  advantage  of  being  able  to  strike  without 
being  penalized.  Among  the  former,  consequently, 
there  commenced  a  tendency  to  cancel  registration 
under  the  Act.  In  the  year  following  the  passing  of  the 
Amending  Act,  eighteen  unions  made  such  cancellations. 

This  procedure  opened  up  a  division  between  those 
unions  which  favored  conciliation  and  arbitration  and 
those  which  preferred  the  method  of  industrial  unionism 
that  was  manifesting  itself  in  New  Zealand  as  in  other 
parts  of  the  world.  The  latter  became  organized  into  the 
New  Zealand  Federation  of  Labor,  with  the  niiners' 
unions  as  its  leading  spirits.  It  advocated  a  policy  of 
revolutionary  socialism  and  set  about  the  creation  of  a 
so-called  Independent  Labor  Party.  Through  the  years 
1910  to  1914,  as  the  record  of  strikes  shows,  it  created 
a  significant  disturbance  of  the  industrial  peace  that  had 
hitherto  prevailed.  One  strike,  which  illustrates  the 
division  within  the  unions  and  the  support  of  the  em- 
ployers to  the  Act,  may  be  briefly  described: 

In  May,  1912,  a  strike  broke  out  in  the  Waihi  gold  mines. 
The  majority  of  the  workers  were  members  of  the  New  Zea- 
land Federation  of  Labor,  and  had  refused  to  work  with  the 
engine  drivers  and  winders  in  the  mines,  who  had  formed 

25 


a  union  and  registered  it  under  the  Act.  Up  to  1911  the 
miners'  union,  comprising  most  of  the  workers,  had  been 
registered  but  had  cancelled  its  registration.  The  engine 
drivers,  now  deprived  of  the  protection  and  benefit  of  the 
Act,  had  formed  a  separate  union,  and  registered  it  in  order 
to  enter  into  an  industrial  agreement  with  their  employers. 
It  was  their  action  which  led  to  the  strike.  The  strike 
"fizzled  out."  All  new  workers  employed  were  formed  into 
unions  and  registered  under  the  Act,  so  that  the  employers 
could  have  a  binding  agreement  entered  upon. 

In  1913  an  attempt  was  made  at  a  general  strike,  but 
after  a  severe  struggle  was  defeated.  It  is  significant  that 
few  unions  registered  under  the  Act  took  part  in  the 
strike,  which  was  engineered  throughout  by  the  New 
Zealand  Federation  of  Labor.  Further,  the  employers 
insisted  on  registration  under  the  Act  as  one  of  the  condi- 
tions of  settlement,  and  the  striking  workers  had  to  sub- 
mit to  these  terms.  Thus  the  Act  has,  it  seems,  become  a 
bulwark  to  the  employers. 

Labor  Disputes  Investigation  Act 

The  persistent  action  of  unions  not  registered  under  the 
Act  in  disturbing  industrial  peace  and  in  seeking  to  break 
down  the  administration  of  the  Industrial  Conciliation 
and  Arbitration  Act  led  to  the  passage  of  an  Act  modeled 
on  the  Canadian  Industrial  Disputes  Investigation  Act. 
This  Act  dates  from  1913  and  provides  additional  ma- 
chinery for  the  investigation  of  disputes.  It  applies  only 
to  societies  of  workers  not  at  the  time  bound  by  any 
award  or  industrial  agreement  under  the  Industrial  Con- 
ciliation and  Arbitration  Act,  1908,  and  to  employers  of 
such  workers.  In  case  of  a  dispute  relating  to  conditions  of 
employment,  notice  may  be  given  to  the  Minister  of 
Labor  of  the  parties  and  their  claims.  The  Minister  shall 
thereupon  refer  the  matter  for  inquiry  and  conciliation  to 
a  conciliation  commissioner  or  for  investigation  to  a 
Labor  Dispute  Committee.  This  committee  is  to  consist 
of  not  less  than  three  nor  more  than  seven  members,  one 
of  whom  is  to  be  chairman.  The  other  members  are  to  be 
appointed,  respectively,  in  equal  numbers,  by  the  em- 
ployers and  workers,  parties  to  the  dispute,  and  they  in 
turn  elect  an  outside  person  as  their  chairman.  In  case  of 
failure  to  complete  the  committee  in  any  way,  the  Minister 
of  Labor  has  the  right  to  appoint.     The  committee  is 

26 


required  to  endeavor  to  effect  a  settlement,  and  in  case  of 
failure,  to  report  to  the  Minister  and  submit  at  least  two 
proposals  for  settlement.  If  a  settlement  is  not  arrived 
at  within  fourteen  days,  the  Registrar  of  Industrial  Unions 
shall  carry  out  a  secret  ballot  among  the  workers.  Where 
the  Labor  Dispute  Committee  has  not  made  any  recom- 
mendations the  question  put  shall  be  whether  a  strike 
shall  take  place.  Where  recommendations  have  been 
made,  their  acceptance  shall  be  submitted  to  ballot.  At 
the  same  time,  a  similar  ballot  shall  be  put  to  employers, 
the  word  "lockout,"  however,  being  substituted  for  the 
word  "strike."  Where  an  agreement  is  arrived  at  by 
these  means,  it  is  to  have  the  same  weight  and  binding 
force  as  an  industrial  agreement  under  the  Industrial 
Conciliation  and  Arbitration  Act.  Strikes  are  unlawful 
unless  notice  has  been  given  of  the  presence  of  a  dispute; 
before  the  expiration  of  seven  days  after  publication  of  the 
results  of  secret  ballot;  and  during  currency  of  an  agree- 
ment. The  penalty  is  a  fine  not  exceeding  £10  on  each 
individual.  A  lockout  is  unlawful  under  similar  condi- 
tions and  is  punishable  by  a  fine  not  exceeding  £500. 
Aiding  and  abetting  an  unlawful  strike  or  lockout  is 
penalized  equally  in  the  case  of  worker  and  employer. 


27 


VI 

STATISTICAL  COMPARISONS 

The  relative  success  of  the  methods  of  conciliation  and 
arbitration  during  the  three  differing  periods  above 
described  is  indicated  in  Table  2.  In  ascribing  the  settle- 
ment of  a  dispute  to  conciliation,  account  is  taken  only 
of  those  that  were  fully  settled  by  this  method. 


TABLE  2:  NUMBER  AND  PERCENTAGE  OF  DISPUTES  SETTLED 
BY  CONCILIATION  AND  ARBITRATION,  RESPECTIVELY, 
1894-I9OI,    I9O2-I908,    I9O9-I918 


Period 


Number 


Conciliation         Arbitration 


Percentage 


Conciliation  Arbitration 


Total 

868 

878 

49.7 

50.3 

1894-1901    

51 

100 

33.8 

66.2 

1902-1908    

22 

372 

5.6 

94.4 

1909-1918    

795 

406 

66.2 

33.8 

It  will  be  seen  that  the  number  of  disputes  referred  to 
conciliation  has  varied  greatly  during  the  periods.  In  the 
first  period,  employers  took  cases  to  the  Arbitration  Court 
twice  as  frequently  as  they  settled  them  by  voluntary 
conciliation.  In  the  second  period,  while  the  conciliation 
machinery  still  remained,  it  was  practically  nullified.  In 
the  third  period,  disputes  were  settled  by  conciliation 
twice  as  frequently  as  they  were  referred  to  the  higher 
Court. 

A  statement  more  in  detail  of  the  activities  of  the 
tribunals  of  conciliation  and  arbitration  since  1904  is 
available  and  is  summarized  in  the  following  Table  3. 


28 


TABLE  3  :  INDUSTRIAL  AGREEMENTS,  RECOMMENDATIONS, 
AND  AWARDS  IN  CONCILIATION  AND  ARBITRATION,  I9O4- 
I918 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Industrial 

Recommendations 

Awards 

March  31st 

Agreements 

in  Conciliation 

in  Arbitration 

Total 

358 

1,1G7 

1,SS3 

1904 

19 

13 

25 

1905 

15 

10 

26 

1906 

5 

7 

52 

1907 

4 

12 

59 

1908 

10 

15 

98 

1909 

12 

9 

88 

1910 

14 

102 

89 

1911 

17 

87 

74 

1912 

25 

119 

80 

1913 

32 

118 

94 

1914 

42 

166 

93 

1915 

34 

93 

71 

1916 

21 

134 

102 

1917 

63 

159 

168 

1918 

45 

123 

114 

In  this  table  industrial  agreements,  recommendations 
of  conciliation  tribunals,  and  awards  of  the  Court  of 
Arbitration  are  given  separately.  It  must  be  remembered 
that  industrial  agreements  are,  in  most  cases,  arrived  at 
before  conciliation  tribunals,  and  in  every  case  are  in- 
stances of  voluntary  conciliation.  Further,  industrial 
agreements  arrived  at  in  conference  are,  in  a  considerable 
number  of  cases,  taken  to  the  Court  of  Arbitration  and 
made  into  awards,  so  as  to  bind  not  merely  the  parties, 
but  all  engaged  in  the  same  industry  in  the  specified 
locality.  This  action  is  taken  in  most  cases  by  employers 
to  safeguard  themselves  against  the  competition  of  other 
employers  whom  only  an  award  could  compel  to  pay  the 
same  rates  of  wages.  This  custom  tends,  therefore,  to 
exaggerate  somewhat  the  activity  of  the  Court  of  Arbi- 
tration as  compared  with  the  conciliation  tribunals. 

A  closer  analysis  of  the  activities  of  the  Councils  of 
Conciliation  since  their  inauguration  in  1910  is  given  in 
Table  4.  This  apportions  the  disputes  into  those  fully 
settled,  those  in  which  a  considerable  measure  of  agree- 
ment had  been  arrived  at,  and  those  where,  in  default  of 
any  measure  of  agreement  by  conciliation,  the  whole 
matter  was  referred  to  the  Court  of  Arbitration. 

29 


TABLE    4:      DISPUTES    REFERRED    TO    AND    DISPOSED    OF    BY 
COUNCILS  OF  CONCILIATION,   I9IO-I918 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Number  Fully 

Number  Partly 

Number  Referred 
to  Court 

March  31st 

Total 

Settled 

Settled 

of  Arbitration  <• 

Total 

1^01 

795 

216 

190 

1910 

102 

67 

23 

12 

1911 

87 

65 

14 

8 

1912 

119 

86 

19 

14 

1913 

118 

74 

23 

21 

1914 

166 

112 

28 

26 

1915 

101 

61 

23 

17 

1916 

177 

103 

31 

43- 

1917 

190 

127 

32 

31 

1918 

141 

100 

23 

18 

"  These  form  only  a  portion  of  cases  handled  by  that  Court;  see  Table  3. 

The  fact  that  of  these  1,201  disputes  less  than  200  were 
referred  to  the  Court  of  Arbitration  is  a  clear  illustration 
of  the  importance  of  conciliation  in  the  New  Zealand  sys- 
tem. 

As  stated  above,  the  Act  allows  what  are  known  as 
under-rate  workers  to  apply  for  permits  to  work  at  a  rate 
lower  than  the  minimum  prescribed  in  an  award.  The 
following  Table  5  gives  the  number  of  such  permits 
granted  during  the  years  1907-1915. 


TABLE     5:         PERMITS      GRANTED      UNDER-RATE      WORKERS, 
I907-I915 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Permits 

Year  ending 

Permits 

March  31st 

Granted 

March  31st 

Granted 

1907 

239 

1913 

199 

1908 

265 

1914 

208 

1909 

311 

1915 

122 

1910 

227 

1911 

289 

1912 

176 

The  number  of  strikes  that  have  occurred  in  New 
Zealand  since  the  inauguration  of  the  system  of  arbitra- 
tion is  tabulated  in  the  following  Table  6.     With  such 

30 


small  figures  as  are  therein  shown,  there  is  no  need  to  add 
the  usual  statistics  of  hours  and  wages  lost.  Since  few  of 
the  strikes  have  been  of  long  duration,  the  loss  in  hours 
and  wages  has  likewise  been  small. 

TABLE   6:      NUMBER   OF    STRIKES    IN    NEW   ZEALAND,    1894- 
I918 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Number  of 

Year  ending 

Number  of 

March  31st 

Strikes 

March  31st 

Strikes 

1894-1905 

nil 

1912 

20 

1906 

1 

1913 

23 

1907 

12 

1914 

46 

1908 

12 

1915 

4 

1909 

4 

1916 

7 

1910 

11 

1917 

8 

1911 

15 

1918 

6 

The  penal  provisions  of  the  Act  against  strikes  and 
breaches  of  awards  and  agreements  are  automatically- 
applied.  Table  7  presents  the  statistics  of  action  taken  to 
enforce  awards  and  prosecute  for  strikes  and  lockouts. 
Lockouts  seldom  occur. 


TABLE   7:      NUMBER   OF    PROSECUTIONS    FOR   ENFORCEMENT 
OF  AWARDS  AND  FOR  STRIKES  AND  LOCKOUTS,  I9IO-I918 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Enforcement  of 

Prosecutions  for 

March  31st 

Awards 

Strikes  and  Lockouts 

1910 

661 

6 

1911 

539 

69 

1912 

464 

2 

1913 

436 

50 

1914 

363 

7 

1915 

340 

— 

1916 

285 

— 

1917 

194 

17 

1918 

288 

~ 

The  cost  of  administration  of  the  system  since  the  year 
1907  is  given  in  Table  8. 

31 


TABLE  8:      COST  OF  ADMINISTRATION  OF  CONCILIATION  AND 
ARBITRATION,   I907-I915 

(Annual  Reports,  New  Zealand  Department  of  Labor) 


Year  ending 

Cost 

Year  ending 

Cost 

March  31st 

£ 

March  31st 

£ 

1907 

4,525 

1913 

8,172 

1908 

4,075 

1914 

7,756 

1909 

7,103 

1915 

7,962 

1910 

6,902 

1911 

6,795 

1912 

6,924 

1^  The  period  selected  comprises  two  years  before  the 
great  activity  following  on  the  Amending  Act  of  1908, 
when  the  Councils  of  Conciliation  were  created.  Each 
of  the  three  commissioners  appointed  under  this  Act 
receives  a  salary  of  £500.  The  salaries  paid  to  the  three 
members  of  the  Court  of  Arbitration  and  to  the  three 
commissioners  total  £4,300.  This  item  forms,  therefore, 
a  large  proportion  of  the  total  cost  of  the  system. 

The  system  has  been  accompanied  by  a  general  increase 
in  wages.  Evidence  of  this  is  furnished  by  comparisons  of 
wages  in  several  occupations  from  the  earliest  to  the 
latest  awards.  These  are  set  forth  in  Table  9  for  boot- 
makers; painters,  drivers,  brick,  pottery  and  clay  workers; 
butchers;  carpenters  and  joiners,  and  "laborers." 


TABLE    9:      MINIMUM    WAGE    RATES    FOR   VARIOUS    OCCUPA- 
TIONS FROM   EARLIEST  TO   LATEST  AWARDS 


Laborers 

Bootmakers 

Painters 

Drivers 

Minimum 
Rate 

Minimum 
Rate 

Minimum 
Rate 

Minimum  Rates 

Year 

Per  hour 

Year 

per  hour 

Year 

per  hour 

Year 

Hourly 

Weekly 

d 

d 

d 

d 

i  d 

1903 

10.5 

1899 

10.0 

1898 

13.0 

1902 

12.0 

45.0 

1906 

10.5 

1903 

11.25 

1901 

14.0 

1906 

12.0 

42.0 

1909 

12.0 

1905 

12.0 

1904 

15.0 

1909 

13.5 

44.0 

1913 

14.0 

1909 

12.0 

1908 

15.0 

1912 

13.5 

48.0 

1916 

14.0 

1912 
1916 

14.0 
15.0 

1911 
1913 
1916 

15.0 
16.5 
18.0 

1916 

15.0 

52.0 

32 


TABLE    9:      MINIMUM    WAGE    RATES    FOR  VARIOUS    OCCUPA- 
TIONS   FROM    EARLIEST   TO    LATEST    AWARDS Continued 


Brick.  Pottery,  and 
Clay  Workers 

Carpenters  and  J 

oiners 

Butchers  (general) 

Minimum 

Rates 

Minimum  Rates 

Minimum 

Rates 

Year 

Hourly 

Weekly 

Year 

Hourly 

Weekly 

Year 

Weekly 

d 

5  d 

d 

J  d 

i  d 

1903 

12.0 

45.0 

1S99 

14.0 

48.0 

1899 

35.0 

1904 

12.0 

45.0 

1902 

15.0 

51.0 

1902 

40.0 

1909 

12.0 

45.0 

1905 

15.0 

51.0 

1906 

43.0 

1911 

12.75 

45.0 

1907 

IG.O 

55.0 

1909 

50.0 

1915 

13.5 

1911 

16.5 

57.0 

1912 

51.0 

1914 

18.0 

* 

1916 

60.0 

1917 

18.0 

* 

♦Weekly  rates  not  fixed. 


It  will  be  noted  that  in  practically  every  case  the  in- 
crease over  the  respective  periods  covered  was  substantial. 
While  other  causes  presumably  contributed  to  the  ad- 
vance, it  is  clear  from  the  preceding  discussion  that  the 
system  was  an  important  factor. 

These  tables  also  reflect  the  conservative  character  of 
the  decisions  of  the  Councils  and  the  Court.  First  they 
suggest  that  the  existing  award  was  not  to  be  altered 
unless  good  cause  could  be  shown.  Thus,  the  minimum 
hourly  and  weekly  rates  of  brick,  pottery,  and  clay  workers 
remained  unaltered  for  several  years,  while  in  every  occu- 
pation included  except  that  of  general  butcher,  an  award 
was  repeated  at  least  once,  so  far  as  minimum  rates  were 
concerned.  Second,  such  increases  as  were  granted, 
especially  before  the  war,  were  slight.  In  fact  they  were 
in  some  cases  less  than  the  increase  in  the  cost  of  living. 

The  relation  of  the  minimum  wage  to  the  scale  of  wages 
prevailing  in  an  industry  should  be  briefly  noted.  As 
stated  above,  the  minimum  wage  in  New  Zealand  is  close 
to  the  average  wage  in  the  trade.  The  Secretary  of  the 
Department  of  Labor  in  his  Annual  Report  for  1909  as- 
serted that  few  workers  had  accepted  the  minimum  wage, 
and  most  of  them  were  earning  more.  For  example,  in  the 
case  of  the  bootmaking  trade,  in  which,  as  shown  in 
Table  9  above,  the  rate  was  as  low  as  for  unskilled 
laborers,  it  was  asserted  that  in  Auckland  66  per  cent,  in 

33 


Wellington  85  per  cent,  in  Christchurch  66  per  cent,  and 
in  Dunedin  50  per  cent  of  the  workers  were  receiving 
wages  above  the  minimum.  For  all  trades  in  the  centers 
given  above,  the  proportions  were,  respectively,  61.25%, 
57.5%,  47%,  and  46.5%.  In  1910  the  Minister  altered 
these  latter  figures  to  63%,  64%,  63%,  and  56.5%, 
respectively,  and  concluded: 

There  is  sufficient  evidence  to  show  that  in  our  manufactur- 
ing industries  at  least  an  average  of  50  per  cent  of  the  workers 
compared  received  more  than  the  rate  granted  in  the  awards 
of    the  Court  of  Arbitration. 

In  other  words   the   minimum  wage  has   not  been  a 
maximum. 


34 


VII 
RESULTS  OF  THE  NEW  ZEALAND  SYSTEM 

It  must  be  said  of  the  New  Zealand  system  of  concilia- 
tion and  arbitration  that  it  has  not  realized  all  that  was 
hoped  for  from  its  introduction.  Notwithstanding  the 
penal  provisions  against  strikes  enforced  since  1908, 
strikes  have  continued  to  occur  and  even  a  general  strike 
was  attempted.  The  system  has,  therefore,  by  no  means 
given  universal  satisfaction.  At  times  the  employees 
have  been  discontented,  at  other  times  the  employers, 
according  as  the  system  in  actual  operation  appeared  to 
work  to  the  disadvantage  of  the  one  or  the  other  party. 
Again,  the  awards  of  the  Court  have  not  been  universally 
respected,  as  the  considerable  number  of  prosecutions  for 
the  enforcement  of  awards  indicates. 

Nevertheless,  it  appears  that  the  system,  especially  in 
respect  to  conciliation,  has  achieved  substantial  results. 
As  the  statistical  comparisons  already  given  show,  the 
system  of  conciliation  has  in  a  broad  way  been  effective 
in  the  adjustment  of  industrial  disputes.  Two-thirds  of 
all  controversies  over  wages  and  working  conditions  have 
been  settled  by  agreements  and  a  significant  portion  of  the 
remainder  has  been  partially  settled  in  the  same  way. 
It  is  clear,  therefore,  that  conciliation  has  been  a  very 
essential  feature  of  the  New  Zealand  system.  It  must 
be  borne  in  mind  that  the  efficacy  of  conciliation  may 
be  attributable  in  part  to  the  existence  of  the  principle 
of  compulsory  arbitration,  which  might  easily  make  the 
two  parties  more  disposed  to  compromise,  on  grounds  of 
expediency,  if  for  no  other  reason. 

Conciliation  and  arbitration  in  New  Zealand  have  been 
accompanied  by  increased  wages,  although  numerous 
other  factors  have  contributed  to  the  increase. 

It  may  be  noted  that  the  minimum  wages  awarded  by 
the  Courts  are  exceeded  in  the  case  of  a  large  share  of  the 
workers.  In  other  words,  the  minimum  wage  has  not 
tended  to  become  the  maximum.  Moreover,  contrary  to 
the  experience   in  Australia,^   it  would   appear  that   the 

^National  Industrial  Conference  Board,  Research  Report  No.  10,  Arbitration 
and  Wage-Fixing  in  Australia,  p.  41. 

35 


awards  in  New  Zealand  have  not  resulted  In  a  relative 
under-valuation  of  skill  by  raising  the  wages  of  the  un- 
skilled workmen. 

While  the  system  has  contributed  to  a  shortening  of  the 
workday,  much  if  not  most  of  the  reduction  in  work- 
hours  is  directly  attributable  to  the  legislative  enactment 
of  1901  which  introduced  the  48-hour  week. 

To  sum  up,  it  may  be  said  that  the  system  of  concilia- 
tion and  arbitration  in  New  Zealand,  while  by  no  means 
curing  industrial  unrest,  has  shown  the  value  of  con- 
ciliation as  a  means  of  settling  industrial  disputes  and 
preventing  them  from  becoming  more  serious.  For  a 
long  time  after  the  adoption  of  the  Act  there  were  practi- 
cally no  strikes  and,  despite  some  increase  in  recent  years, 
they  have  on  the  whole  been  relatively  infrequent.  It  is 
true  that  industrial  peace  prevailed  from  1894  to  1905 
largely  because  workers  were  securing  most  of  their  de- 
mands. These  demands,  however,  were  in  general 
moderate  and  justified  by  the  increasing  prosperity  of 
the  country.  In  the  later  awards  of  the  Court  more  con- 
sideration appears  to  have  been  given  to  the  interests  of 
employers.  In  particular,  there  has  been  a  noteworthy 
disposition  on  the  part  of  the  Courts  to  refuse  unreason- 
able demands.  This  undoubtedly  has  tended  to  accent- 
uate the  industrial  unrest,  but  no  just  system  of  wage- 
fixing  could  have  done  otherwise,  and  the  fact  that  in- 
dustrial unrest  has  occurred  is  not  to  be  regarded  so  much 
a  reflection  on  the  system  of  conciliation  and  arbitration 
as  a  reflection  of  a  great  variety  of  causes,  many  of  them 
world-wide  in  their  import,  which  were  beyond  the 
ability  of  any  arbitration  system  to  solve  effectively. 


36 


Appendix  A 

The  Important  provisions  of  the  various  amendatory 
legislation  to  the  original  Act  of  1894  are  briefly  epito- 
mized below. 

Amending  Act  of  1895  stipulated  that  a  minimum 
number  of  five  employers  could  associate  to  form  an 
industrial  union  of  employers.  It  provided  for  two 
experts  to  be  nominated  to  assist  the  Court  in  dealing 
with  technical  matters.  Other  minor  amendments  were 
intended  to  make  matters  of  administration  more  simple 
or  more  complete. 

Amending  Act  of  1896  was  only  regulative  in  character 
and  could  have  been  met  by  regulation  instead  of  legisla- 
tion. The  most  important  provision  was  that  no  person 
while  sitting  on  one  Board  should  be  eligible  for  nomina- 
tion or  election  to  a  seat  on  any  other  Board.  The 
same  year  by  regulation  the  Government  decided  that 
Board  members  should  be  paid  a  fee  of  one  guinea  for 
each  day  they  sat. 

Amending  Act  of  1898  struck  out  from  the  sub-title  of 
the  Act  of  1894  the  words  "to  encourage  the  formation 
of  industrial  unions  and  associations."  It  made  more 
explicit  the  power  of  the  Court  to  determine  what  con- 
stituted a  breach  of  an  award,  and  what  penalty  might 
be  attached  thereto,  and  enlarged  the  Court's  jurisdiction 
and  powers  as  to  matters  before  it  at  any  time.  Power 
was  also  given  to  prescribe  a  minimum  rate  of  wages, 
and  provision  was  made  for  fixing  a  lower  rate  for  workers 
unable  to  earn  the  prescribed  minimum. 

The  Consolidating  Act  of  1900  enlarged  the  definition  of 
"industrial  matters,"  hitherto  restricted  to  wages,  hours, 
employment  of  children  and  young  persons,  by  adding: 

{a)  the  claim  of  members  of  an  industrial  union  of  em- 
ployers to  preference  of  service  from  unemployed  members 
of  an  industrial  union  of  workers. 

{b)  The  claim  of  members  of  industrial  unions  of  workers 
to  be  employed  in  preference  to  non-members. 

37 


91904 


The  Act  also  reduced  the  minimum  number  of  em- 
ployers necessary  to  form  an  employers'  industrial  union 
to  two,  retaining  the  original  figure  of  seven  in  the  case 
of  workers.  An  important  provision  was  inserted  in  this 
Act  which  was  to  appear  in  fuller  form  in  1908.  Until  a 
dispute  had  been  disposed  of  neither  the  industrial 
unions  parties  to  the  dispute,  nor  the  individual  em- 
ployers and  workers  affected,  should  do  anything  in  the 
nature  of  a  strike  or  lockout  on  penalty  of  a  fine  not 
exceeding  £50.  By  another  provision,  the  Court  might 
render  an  award  which  could  extend  beyond  any  one  of 
the  eight  industrial  districts  and  even  to  the  whole  of 
New  Zealand. 

Amending  Act  of  1901  made  a  number  of  regulative 
changes,  but  added  the  right  of  the  Court  to  limit  an 
award  to  a  city  or  town  within  an  industrial  district  or  to 
extend  the  award  after  limitation  on  application  by  the 
proper  authorities.  New  definitions  of  "worker"  and 
"industry"  were  inserted,  so  that  the  provisions  of  the 
Act  could  apply  to  practically  every  wage-earner.  The 
Court  of  Arbitration  had  disclaimed  jurisdiction  over 
grocers'  clerks,  street  railway  employers,  and  similar 
workers,  on  the  ground  that  their  occupations  were  not 
properly  industrial. 

The  most  important  amendment  introduced  in  this 
year,  1901,  was  one  allowing  a  dispute  to  go  directly  to 
the  Court  of  Arbitration  without  a  hearing  before  a 
Board  of  Conciliation. 

Amending  Acts  of  1903.  In  both  the  amending  Acts 
of  this  year  there  were  several  regulative  changes,  but 
the  second  amending  Act  added  power  to  extend  an 
award  to  another  industrial  district  where  the  award 
related  to  a  trade  or  manufacture  the  products  of  which 
entered  into  competition  with  those  manufactured  in  the 
industrial  district  where  the  award  was  in  force.  Two 
sections  were  added,  defining  the  circumstances  under 
which  the  dismissal  of  an  employee  would  be  a  breach  of 
the  Act,  and  providing  that  action  in  combination, 
whether  by  employers  or  workers,  to  defeat  an  award 
would  be  punished  as  a  breach  of  an  award. 

Amending  Act  of  1905  introduced  only  three  short 
regulative  clauses. 

Amending  Act  of  1906  introduced  several  more  regula- 
tive changes,  and  made  more  definite  the  procedure  allow- 

38 


ing  for  the  issue  of  permits  to  work  at  less  than  the 
minimum  wage.  Applications  were  henceforth  to  be 
made  in  writing  to  the  Registrar  of  the  Court,  who  was 
to  notify  the  secretary  of  the  industrial  union  of  workers 
in  the  trade.  A  hearing  was  then  to  be  held  where  the 
views  of  the  union  on  the  matter  could  be  expressed.  A 
permit  thus  became  an  official  authorization,  not  an 
arrangement  between  the  worker  and  the  union.  No 
worker  was  to  be  subject  to  a  fine  because  he  refused  to 
work  at  the  rate  of  wages  fixed  in  an  award,  unless  such 
refusal  was  in  pursuance  of  an  intention  to  defeat  the 
award. 

Amending  Act  of  1906  provided  that  the  President  of 
the  Court  should  henceforth  be  known  as  the  Judge  of 
the  Court.  The  nominated  members  were  henceforth  to 
receive  an  annual  remuneration  of  £500. 

Amending  Act  of  1908  introduced  definitions  of  strikes 
and  lockouts  and  fixed  penalties  for  persons  taking  part 
in  or  in  any  way  inciting,  instigating,  and  abetting  strikes 
or  lockouts.  Special  penalties  were  imposed  with  respect 
to  strikes  and  lockouts  in  certain  specified  industries. 
Unions  convicted  of  having  instigated  or  abetted  a  strike 
were  liable  to  suspension  of  their  registration  for  a  period 
not  exceeding  two  years. 

The  most  important  change  introduced  by  this  Amend- 
ing Act  was  the  abolition  of  the  Conciliation  Boards,  and 
the  substitution  therefor  of  Councils  of  Conciliation,  and 
the  provision,  repealing  the  Amendment  of  1901,  that 
"no  industrial  dispute  shall  be  referred  to  the  Court  until 
it  has  been  first  referred  to  a  Council  of  Conciliation." 
The  machinery  and  regulations  for  the  Councils  were  em- 
bodied in  the  Act.  Assessors  to  assist  the  chairman  of 
the  Council  of  Conciliation  must  be  or  have  been  engaged 
in  the  industry  in  respect  of  which  the  dispute  had  arisen. 
The  powers  and  duties  of  the  Council  with  respect  to  dis- 
putes were  to  be  practically  the  same  as  those  of  the 
earlier  Boards  of  Conciliation.  Other  provisions  penalized 
employers  for  dismissing  workers  for  taking  part  in  trade 
union  activities  or  for  action  in  connection  with  an  arbi- 
tration award,  or  because  such  person  was  entitled  to 
the  benefit  of  an  award.  The  onus  of  proof  that  a  worker 
was  dismissed  for  other  reasons  was  laid  upon  the  em- 
ployer. 

39 


The  Amending  Act  of  1911  provided  for  an  industrial 
agreement  to  be  made  into  an  award  where  the  agreement 
bound  a  majority  of  the  workers  in  the  district.  An  award 
might  also  be  extended  over  more  than  one  industrial 
district,  or  even  over  the  whole  country.  Provision  was 
made  for  the  procedure  in  a  dispute  that  had  not  been 
settled  by  conciliation  and  concerning  which  the  Council 
of  Conciliation  had  made  a  recommendation.  The 
parties  were  to  be  afforded  the  opportunity  of  expressing 
their  disagreement  with  the  recommendation.  Should 
they  fail  to  do  so,  the  recommendation  was  to  operate  as 
an  award.  In  case  of  their  signifying  their  disagreement, 
the  matter  was  to  be  referred  to  the  Court  of  Arbitration 
forthwith. 

The  Amending  Act  of  1913  consisted  of  two  clauses,  and 
was  passed  expressly  to  provide  that  the  recommendation 
of  a  Council  of  Conciliation  to  which  the  parties  had  not 
objected  should  operate  as  an  industrial  agreement,  not 
an  award.  In  explanation  of  this  distinction  it  should 
be  said  that  an  industrial  agreement  binds  only  the 
parties  agreeing  thereto,  while  an  award  covers  all  em- 
ployers and  all  workers  in  the  industry  in  the  district 
specified. 


Appendix  B 


ABRIDGED  TEXT  OF   NEW  ZEALAND   INDUSTRIAL 

CONCILIATION  AND  ARBITRATION  ACT, 

1908,  WITH  AMENDMENTS 

"Industrial  matters"  means  all  matters  affecting  or 
relating  to  work  done  or  to  be  done  by  workers,  or  the 
privileges,  rights,  and  duties  of  employers  or  workers 
in  any  industry,  not  involving  questions  which  are  or 
may  be  the  subject  of  proceedings  for  an  indictable 
offense;  and,  without  limiting  the  general  nature  of 
the  above  definition,  includes  all  matters  relating  to 

(a)  The  wages,  allowances,  or  remunerations  of  workers 
employed  in  any  industry,  or  the  prices  paid  or  to  be  paid 
therein  in  respect  of  such  employment; 

(b)  The  hours  of  employment,  sex,  age,  qualification,  or 
status  of  workers,  and  the  mode,  terms,  and  conditions  of 
employment; 

(f)  The  employment  of  children  or  young  persons,  or  of 
any  person  or  persons  or  class  of  persons,  in  any  industry, 
or  the  dismissal  or  a  refusal  to  employ  any  particular  person 
or  persons  or  class  of  persons  therein; 

(d)  The  claim  of  members  of  an  industrial  union  of  em- 
ployers to  preference  of  service  from  employed  members  of 
an  industrial  union  of  workers; 

((f)  The  claim  of  members  of  industrial  unions  of  workers 
to  be  employed  in  preference  to  non-members; 

(/)  Any  established  custom  or  usage  of  any  industr)-, 
either  generally  or  in  the  particular  district  affected.  .  .  . 

"Industry"  means  any  business,  trade,  manufacture, 
undertaking,  calling,  or  employment  in  which  workers  are 
employed. 

"Worker"  means  any  person  of  any  age  of  cither  sex  em- 
ployed by  any  employer  to  do  any  work  for  hire  or  reward. 
Subject  to  the  provisions  of  this  Act,  any  society  consists  of 
not  less  than  three  persons  in  the  case  of  employers,  or  fifteen 
in  the  case  of  workers,  lawfully  associated  for  the  purpose  of 
protecting  or  furthering  the  interests  of  employers  or  workers 


or  in  any  connection  with  any  specified  industry  or  indus- 
tries in  New  Zealand,  may  be  registered  as  an  industrial 
union  under  this  Act  on  compliance  with  the  following 
provisions.  .  .  . 

The  effect  of  registration  shall  be  to  render  the  industrial 
union,  and  all  persons  who  are  members  thereof  at  the  time 
of  registration,  or  who  after  such  registration  become  mem- 
bers thereof,  subject  to  the  jurisdiction  by  this  Act  given  to  a 
Board  and  a  Court  respectively  and  liable  to  all  the  provisions 
of  this  Act,  and  all  such  persons  shall  be  bound  by  the  rules  of 
the  industrial  union  during  the  continuance  of  their  member- 
ship. 

Any  Council  or  other  body,  however  designated,  repre- 
senting not  less  than  two  industrial  unions  of  either  em- 
ployers or  workers  may  be  registered  as  an  industrial 
association  of  employers  or  workers  under  this  Act. 

The  parties  to  industrial  agreements  under  this  Act 
shall  in  every  case  be  trade  unions  or  industrial  unions  or 
industrial  associations  or  employers;  and  any  such 
agreement  may  provide  for  any  matter  or  thing  affecting 
any  industrial  matter,  or  in  relation  thereto,  or  for  the 
prevention  or  settlement  of  an  industrial  dispute. 

Every  industrial  agreement  shall  be  for  a  term  to  be 
specified  therein,  not  exceeding  three  years  from  the  date 
of  the  making  thereof.  .  .  . 

Notwithstanding  the  expiring  of  the  term  of  the  indus- 
trial agreement,  it  shall  continue  in  force  until  superseded 
by  another  industrial  agreement  or  by  an  award  of  the 
Court,  except  where  .  .  .  the  registration  of  an  industrial 
union  of  workers  bound  by  such  agreement  has  been 
cancelled. 

The  Governor  may  from  time  to  time  .  .  .  constitute 
and  divide  New  Zealand  or  any  portion  thereof  into  such 
industrial  districts,  with  such  names  and  boundaries, 
as  he  thinks  fit. 

The  Governor  may  from  time  to  time  appoint  such 
persons  as  he  thinks  fit  (not  exceeding  four  in  number) 
as  conciliation  commissioners  ...  to  exercise  the  powers 
and  jurisdiction  hereinafter  set  forth. 

Any  industrial  union,  industrial  association,  or  employer 
being  a  party  to  an  industrial  dispute,  may  make  applica- 
tion in  the  prescribed  form  to  the  commissioner  exercising 
jurisdiction  within  the  industrial   district  in  which   the 

42 


dispute  has  arisen  that  the  dispute  may  be  heard  by  a 
Council  of  Conciliation. 

It  shall  be  the  duty  of  the  Council  to  endeavor  to  bring 
about  a  settlement  of  the  dispute,  and  to  this  end  the 
Council  shall,  in  such  manner  as  it  thinks  fit,  expeditiously 
and  carefully  inquire  into  the  dispute  and  all  matters 
affecting  the  merits  and  the  right  settlement  thereof. 

In  the  course  of  the  inquiry  the  Council  shall  make  all 
such  suggestions  and  do  all  such  things  as  it  deems  right 
and  proper  for  inducing  the  parties  to  come  to  a  fair  and 
amicable  settlement  of  the  dispute. 

The  procedure  of  the  Council  shall  in  all  respects  be 
absolutely  in  the  discretion  of  the  Council,  and  the  Council 
shall  not  be  bound  to  proceed  with  the  inquiry  in  any 
formal  manner,  or  formally  to  sit  as  a  tribunal,  or  to  hear 
any  addresses  or  evidence  save  such  as  the  Council  deems 
necessary  or  desirable. 

The  Council  may  on  the  inquiry  hear  any  evidence 
that  it  thinks  fit,  whether  such  evidence  would  be  legally 
admissible  in  a  court  of  law  or  not. 

No  barrister  or  solicitor,  whether  acting  under  a  power 
of  attorney  or  otherwise,  shall  be  allowed  to  appear  or  be 
heard  before  the  Council. 

If  a  settlement  of  the  dispute  is  arrived  at  by  the  parties 
in  the  course  of  the  inquiry,  the  terms  of  the  settlement 
shall  be  set  forth  as  an  industrial  agreement. 

If  no  settlement  of  the  dispute  is  arrived  at  by  the 
parties  in  the  course  of  the  inquiry,  the  Council  shall 
endeavor  to  induce  the  parties  to  agree  to  some  temporary 
and  provisional  arrangement  until  the  dispute  can  be 
determined   by  the  Court  of  Arbitration. 

.  .  .  the  Council  may  make  such  recommendation  for 
the  settlement  of  the  dispute  according  to  the  merits  and 
substantial  justice  of  the  case  as  the  Council  thinks  fit.  .  .  . 

No  such  recommendation  shall  be  made  unless  it  is 
unanimously  agreed  to  by  all  the  assessors,  and  the  com- 
missioner shall  have  no  vote  in  respect  of  the  making  or 
nature  of  any  such  recommendation. 

Where  a  recommendation  of  a  Council  of  Conciliation 
is  filed  with  the  Clerk  of  Awards  with  the  notification 
that  no  settlement  has  been  arrived  at,  the  clerk  shall,  as 

43 


soon  as  practicable,  give  notice  in  the  prescribed  form  to 
all  the  parties  to  the  dispute  of  the  filing  of  the  recom- 
mendation and  of  the  place  where  it  may  be  seen,  and 
requiring  them,  if  they  disagree  with  the  recommendation, 
to  signify  their  disagreement  within  one  month,  and,  if 
they  so  desire,  to  state  reasons  for  such  disagreement. 

If  within  the  time  aforesaid  no  notice  of  disagreement 
has  been  filed,  the  clerk  shall  as  soon  as  possible  thereafter 
give  notice  in  the  prescribed  form  to  the  parties  of  the 
fact,  and  the  recommendation  shall,  as  from  seven  days 
after  the  date  of  that  notice  operate  and  be  enforceable  in 
the  same  manner  as  an  industrial  agreement  duly  executed 
and  filed  by  the  parties. 

If  any  party  to  the  dispute  duly  signifies  his  disagree- 
ment with  the  recommendation,  the  dispute  shall  be 
referred  by  the  clerk  to  the  Court  for  settlement,  and 
thereupon  the  dispute  shall  be  before  the  Court,  and  the 
Court  may,  after  hearing  any  of  the  parties  that  have 
signified  their  disagreement,  incorporate  the  terms  of 
the  recommendation  in  an  award. 

Where  a  notification  that  no  settlement  has  been  arrived 
at  has  been  delivered  to  the  Clerk  of  Awards  and  the 
Council  makes  no  recommendation  for  the  settlement 
of  the  dispute,  the  clerk  shall  forthwith  refer  the  dispute 
to  the  Court  for  settlement,  and  thereupon  the  dispute 
shall  be  deemed  to  be  before  the  Court. 

There  shall  be  one  Court  of  Arbitration  for  the  whole  of 
New  Zealand  for  the  settlement  of  industrial  disputes 
pursuant  to  this  Act. 

The  Court  shall  consist  of  three  members,  who  shall 
be  appointed  by  the  Governor.  Of  the  three  members  of 
the  Court,  one  shall  be  the  judge  of  the  Court,  and  shall 
be  so  appointed,  and  the  other  two  (hereinafter  called 
"nominated  members")  shall  be  appointed  as  herewith 
provided. 

Of  the  two  nominated  members  of  the  Court  one  shall 
be  appointed  on  the  recommendation  of  the  industrial 
unions  of  employers,  and  one  on  the  recommendation 
of  the  industrial  unions  of  workers. 

The  Court  shall  have  jurisdiction  for  the  settlement 
and  determination  of  any  industrial  dispute  referred  to 
it  under  the  provisions  of  this  Act. 

44 


Any  party  to  the  proceedings  before  the  Court  may 
appear  personally  or  by  agent,  or,  with  the  consent  of 
all  the  parties,  by  barrister  or  solicitor,  and  may  produce 
before  the  Court  such  witnesses,  books,  and  documents 
as  such  party  thinks  proper. 

The  Court  shall  in  all  matters  before  it  have  full  exclu- 
sive jurisdiction  to  determine  the  same  in  such_  manner 
in  all  respects  as  in  equity  and  good  conscience  it  thmks 
fit. 

The  award,  by  force  of  this  Act,  shall  extend  to  and 
bind  as  subsequent  party  thereto  every  trade  union, 
industrial  union,  industrial  association,  or  employer  who, 
not  being  an  original  party  thereto,  is  at  any  time  whilst 
the  award  is  in  force  connected  with  or  engaged  in  the 
industry  to  which  the  award  applies  within  the  industrial 
district  to  which  the  award  applies. 

The  award,  by  force  of  this  Act,  shall  also  extend  to 
and  bind  every  worker  who  is  at  any  time  whilst  it  is  m 
force  employed  by  any  employer  on  whom  the  award  is 
binding;  and  if  such  worker  commits  any  breach  of  the 
award  he  shall  be  liable  to  a  fine  not  exceeding  £10,  to  be 
recovered  in  like  manner  as  if  he  were  a  party  to  the  award. 
When  a  strike  takes  place  in  any  industry  every  worker 
who  is  or  becomes  a  party  to  the  strike  and  who  is  at  the 
commencement  of  the  strike  bound  by  any  award  or 
industrial  agreement  affecting  that  industry,  shall  be 
liable  to  a  penalty  not  exceeding  £10. 

When  a  lockout  takes  place  in  any  industry  every 
employer  who  is  or  becomes  a  party  to  the  lockout  and 
who  is  at  the  commencement  of  the  lockout  bound  by 
any  award  or  industrial  agreement  affecting  that  industry, 
shall  be  liable  to  a  penalty  not  exceeding  £500. 

Everv  person  who  incites,  instigates,  aids,  or  abets  an 
unlawful  strike  or  lockout  or  the  continuance  of  any  such 
strike  or  lockout,  or  who  incites,  instigates,  or  assists  any 
person  to  become  party  to  any  such  strike  or  lockout  is 
liable,  if  a  worker,  to  a  penalty  not  exceeding  £10,  and  it 
an  industrial  union,  industrial  association,  trade  union, 
employer,  or  any  person  other  than  a  worker,  to  a  penalty 
not  exceeding  £200. 

If  any  person  employed  in  any  of  the  industries  to  which 
this  section  applies  strikes  without  having  given  to  his 
employer,  within  one  month  before  so  striking,  not  less 

45 


than  fourteen  days  notice  in  writing,  signed  by  him, 
of  his  intention  to  strike,  or  strikes  before  the  expiry  of 
any  notice  so  given  by  him,  the  striker  shall  be  liable  on 
summary  conviction  before  a  magistrate  to  a  fine  not 
exceeding  £25.  (Employers  who  lock  out  without  similar 
notice  are  liable  to  fine  of  £500.) 

(This  section  applies  to  the  following  industries:  gas, 
electricity,  water  and  milk  supply,  slaughter  of  meat, 
sale  or  delivery  of  coal,  and  working  of  any  ferry,  tramcar, 
or  railway.) 

(A  union  convicted  under  this  penal  section  of  the  Act 
may  have  its  registration  suspended  for  a  period  not 
exceeding  two  years,  thereby  being  deprived  of  the  protec- 
tion of  the  Court  and  of  any  industrial  agreement  or 
award  hitherto  in  force  in  that  industry.) 

Every  industrial  union,  industrial  association,  or 
employer  who  commits  a  breach  of  an  award  or  industrial 
agreement  shall  be  liable  to  a  penalty  not  exceeding  £100 
in  respect  of  every  such  breach. 

Every  employer  who  dismisses  from  his  employment 
any  worker  by  reason  merely  of  the  fact  that  the  worker 
is  an  officer  or  a  member  of  an  industrial  union,  or  merely 
because  such  worker  has  acted  as  an  assessor  on  a  Council 
of  Conciliation  or  has  represented  his  union  in  any 
negotiations  or  conference  between  employers  and  work- 
ers, or  merely  because  such  worker  is  entitled  to  the  benefit 
of  an  award,  order,  or  an  agreement,  is  liable  to  a  penalty 
not  exceeding  £25. 

In  every  case  where  the  worker  dismissed  was  im- 
mediately preceding  his  dismissal  a  president,  vice-presi- 
dent, secretary,  or  treasurer  of  an  industrial  union,  or 
an  assessor  for  a  Council  of  Conciliation,  or  represented 
his  union  in  any  negotiations  or  conference  between 
employers  and  workers,  it  shall  lie  on  the  employer  to 
prove  that  such  worker  was  dismissed  for  a  reason  other 
than  that  he  had  acted  in  any  of  the  said  capacities. 


46 


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